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Independent review of the Australian Greenhouse Office

Hon. Warwick L. Smith LLB, June 2002

6. Conclusions and recommendations

It is clear that the formation of a central Commonwealth agency has been an effective means of developing and implementing the government's climate change agenda. Nevertheless, delivering outcomes while managing a diverse range of stakeholders, some with differing views and expectations, presents a significant challenge to the AGO.

In some instances, stakeholder expectations are probably not yet being fully met, with perceptions remaining that the AGO needs to increase consultation, react more to the industry agenda (as opposed to environment) and have a greater strategic policy focus. However, the AGO appears to be mindful of these issues and is making genuine attempts to consult widely with stakeholders and present a whole-of-government approach to greenhouse gas issues. Broadly speaking, however, it is considered that these perceptions do not point to any significant failure in the AGO's approach or operations, and can be addressed by the measures outlined below and a willingness by all parties to work together to achieve effective outcomes.

The AGO has achieved an acceptable level of efficiency and effectiveness, given some of the constraints it has faced. There are, however, improvements that could be made. Discussion of these, and comments on the scope of the AGO's operations are outlined below. A number of recommendations are made, particularly in the areas of governance, functions and consultation. Figure 5 illustrates the proposed new arrangements and their inter-relationships.

6.1 AGO Structure and governance

As already stated, Australia has benefited from having a central Commonwealth government agency with responsibility for greenhouse matters. Formation of such an agency, with a significant program delivery and policy development role, helps demonstrate Commonwealth government commitment to tackling climate change issues. There is no compelling argument for disbanding the AGO and devolving its responsibilities back to respective line departments. There are, however, some inherent problems with the governance structure of the AGO that have hindered its operations and the achievement of a whole of government approach to greenhouse matters.

Establishment of the AGO as an Executive Agency had the intention of achieving administrative outcomes (eg ongoing tenure, appointment of an Agency Head, capacity to negotiate staff contracts directly) and also promoting a degree of 'independence' of the AGO from the Department of Environment and Heritage. The Order establishing the AGO as an Executive Agency gave the AGO the task of providing a whole-of-government perspective on greenhouse and supporting the work of the Ministerial Council on Greenhouse. But it also identified the Minister for the Environment and Heritage as the Minister responsible for the AGO.

This has provided an inherent tension where the AGO is left unclear as to who is its primary master. It has been required to juggle the wishes of a group of Ministers on the one hand (through the [now disbanded] Ministerial Council on Greenhouse) and the Minister who has responsibility for it as an Executive Agency on the other. The result has been an outcome which all sides consider to be unsatisfactory.

The AGO needs to find an improved approach so that it has clear reporting and accountability lines, but still with effective mechanisms at its disposal to ensure that other relevant portfolios and Ministers have involvement on the appropriate matters and at the appropriate level.

The Ministerial Council on Greenhouse was intended to facilitate a whole of government approach to the AGO's work, but in reality became unwieldy and was not an effective vehicle for achieving this outcome, or the AGO's goals more broadly. The formation of the Sustainable Environment Committee of Cabinet (SEC) provides an opportunity to redress these problems. It will consider high-level climate change policy issues, with decisions on program delivery to be resolved through consultation at officials level. Means to ensure adequate consultation between officials to support the SEC arrangements (and pursuing a whole-of-government approach more generally) are discussed in Section 6.3.

The AGO would benefit from having clearer lines of accountability to a single Minister, than what is presently the case under the Executive Agency model. The Minister for Environment and Heritage is currently the Minister responsible for the AGO, and climate change is primarily an environmental issue (albeit one that requires industry and resource managers to be involved in implementing solutions). Therefore, it is recommended that the Executive Agency be abolished and the AGO moved back into the Department of Environment and Heritage. The Head of the AGO would report to the Secretary of the Department of Environment and Heritage. The functions the AGO would undertake in this new position are elaborated in Section 6.2.

However, it is important that the AGO maintains a separate identity within the Department of Environment and Heritage. The Australian Antarctic Division provides a good model. One practical step would be to co-locate all AGO staff and give the office a discrete location, rather than have them in two locations, one of which is partly integrated with Environment Australia, as is currently the case. The proposal to move all AGO staff to the one location within the John Gorton Building is a step towards this.

A number of submissions suggested that the AGO would be better placed in either the Department of Industry, Tourism & Resources or Prime Minister and Cabinet. Moving the AGO to the industry portfolio would only shift the criticism of an uneven approach to the other side of the coin. As already stated, keeping the AGO in the environment portfolio signals that this is ultimately an environmental issue. Having the AGO policy functions in Prime Minister and Cabinet, and separate from any of the agencies that are implementing the programs that support the policy, would seem to fragment the approach still further across the Commonwealth.

Nevertheless, the AGO does need to ensure that it is adequately consulting with all stakeholders, particularly industry and vegetation managers. These issues are addressed in Section 6.3 below.

Recommendation 1: The AGO's status as an Executive Agency be revoked and it become an agency within the Department of Environment and Heritage, with a Chief Executive Officer who reports to the Secretary of the Department of Environment and Heritage.

Recommendation 2: That all AGO staff be co-located in the one office, which provides a discrete and discernable presence for the AGO from its host Department.

6.2 AGO functions

6.2.1 Policy

A strength of a central agency responsible for greenhouse matters is its capacity to develop and implement policy from a whole-of-government perspective. This has been the role of the AGO, although there has been some criticism that its program delivery obligations and international agenda imperatives have been at the expense of the AGO providing a longer-term strategic policy agenda.

The AGO is central in developing and communicating a long-term Commonwealth agenda for addressing climate change, that articulates costs, benefits, opportunities, trade-offs and the role of key players such as industry. The Australian Government seeks to have a clearly articulated forward vision, integrating program and policy and outlining the roles of government, industry and the Australian community. The AGO was charged with providing this vision.

It is now four and a half years since the Prime Minister made his statement Safeguarding the Future: Australia's Response to Climate Change and three and a half since the release of the National Greenhouse Strategy. Since then there have been significant developments both nationally and internationally that are directly or indirectly relevant to climate change. Indications from stakeholders, particularly industry, were that they would welcome an articulation of the Commonwealth's forward agenda for greenhouse, in light of ongoing developments and future objectives.

An important component of this forward policy agenda should be economic elements of greenhouse policy, particularly emissions trading and carbon credits. The AGO has been involved in some good work on this issue and should seek to enhance its economic analysis expertise to ensure that it has the capacity to continue this work into the longer-term. Industry, in particular, should be encouraged to support and be involved in this work.

International dimensions of the greenhouse debate are becoming increasingly important as Australia seeks to achieve a balance between our national interest and international obligations. The AGO, the Department of Foreign Affairs and Trade (and the Ambassador for the Environment in particular) and the Department of Environment and Heritage have had the most involvement in international climate change negotiations. There appears to be, however, some uncertainty regarding lead and subordinate roles, which needs to be addressed. It is felt that the lead for international climate change issues should be the Department of Foreign Affairs and Trade, through the Ambassador for the Environment, and this should be clearly articulated and understood. Appropriate mechanisms should be in place between officials to ensure that the necessary cross-portfolio consultation occurs.

Recommendation 3: The AGO should continue to be the lead Commonwealth agency on domestic greenhouse policy, with an approach that is whole-of-government and broader than the greenhouse issues that are the mandate of the Department of Environment and Heritage. This should include the industry, environmental, economic and social elements of greenhouse policy.

Recommendation 4: The AGO should develop for Cabinet consideration a strategic framework for Commonwealth action on climate change that includes actions to address the '108% of 1990 by 2008-12' target, and beyond into the next commitment period. This should be developed in accordance with the procedures outlined in Section 6.3.1 below.

Recommendation 5: The Department of Foreign Affairs and Trade should be the lead Commonwealth agency on international climate change issues, in consultation with the AGO and other relevant agencies.

6.2.2 Programs

Program delivery has presented some challenges for the AGO and success in terms of program design and effectiveness of implementation has varied. This said, it is clear that the AGO has a number of programs that are well regarded and that are being delivered very successfully. Expenditure timeframes for some programs, however, have been unrealistic. Current expenditure patterns and budget allocations indicate a self-correction from the initial pressure to deliver funding programs, to a more realistic pattern reflecting the capacity of both the AGO as the program administrator and also the recipients of the funding to take up and implement programs.

This said, there is also a fairly strong view that some programs would be better delivered outside the AGO by line agencies. This is particularly where the programs involve similar issues or stakeholders to extant programs within these line agencies or have other synergies that either provide efficiencies or strengthen outcomes in related areas. It is recommended that program delivery in the AGO be examined by relevant agencies with a view to deciding if delivery of any programs should be moved back to line departments.

Recommendation 6: The Secretaries Sustainable Environment Committee (see recommendation 8), should evaluate all the AGO funding programs and determine whether any would be better delivered by agencies outside the AGO. This assessment should take into account agency core responsibilities and synergies with emerging programs such as the National Action Plan on Salinity and Water Quality. A factor in this assessment should be that any moves not be detrimental to the effectiveness and efficiency of program delivery.

6.3 Improving consultation

6.3.1 Commonwealth

Existing structures within the Commonwealth provide plenty of opportunity for effective communication by the AGO across Commonwealth government agencies and the development and achievement of whole-of-government approaches. The advent of the Sustainable Environment Committee of Cabinet, replacing the Ministerial Council on Greenhouse, provides an opportunity for Ministers to enhance collaboration on greenhouse matters.

In order for the Sustainable Environment Committee to be effective in achieving a better whole-of-government outcome on climate change, it will need to be supported by adequate inter-agency consultation between officials. At the senior, agency head level, it is recommended that a Secretaries Sustainable Environment Committee be established to support the Sustainable Environment Committee of Cabinet. This Secretaries group should also take on additional tasks relating to pursuing whole-of-government perspectives on greenhouse, such as the review of program delivery (see recommendation 6).

Submissions to the Sustainable Environment Committee of Cabinet on greenhouse matters should generally be joint submissions, approved by the Secretaries group and developed through the use of inter-departmental committees and circulation of exposure drafts across departments.

Given their role in international greenhouse policy, the Minister for Foreign Affairs and Trade should be invited to participate in Sustainable Environment Committee meetings where greenhouse issues are on the agenda. The Secretary of the Department of Foreign Affairs and Trade should have a similar role with the Secretaries Sustainable Environment Committee.

Recommendation 7: The Minister for Foreign Affairs and Trade be invited to attend meetings of the Sustainable Environment Committee of Cabinet, where greenhouse matters are on the agenda.

Recommendation 8: A Secretaries Sustainable Environment Committee be established to support the work of the Sustainable Environment Committee of Cabinet and progress whole-of-government approaches to greenhouse policy and program implementation. Membership will be the Secretaries of all corresponding Departments within the Sustainable Environment Committee of Cabinet and the Secretary of the Department of Foreign Affairs and Trade.

6.3.2 States/Territories - review of the National Greenhouse Strategy

An issue brought to the attention of this review was a perception that there was insufficient coordination in the development of Commonwealth and State/Territory climate change initiatives (policy, programs and legislation). Details of the agreed national approach to greenhouse are articulated in the National Greenhouse Strategy (NGS). The NGS is to be reviewed in 2002. To date, a process and timeline for this review has not been determined. The NGS review provides a timely opportunity for the Commonwealth and the States/Territories to examine their collective approaches and address any concerns regarding divergence from agreed mechanisms and timetables.

Commonwealth-State/Territory Ministerial Councils have identified roles in the implementation of the NGS. Given the changes to Ministerial Councils agreed by the Council of Australian Governments (CoAG) in June 2001, it would also be beneficial to reassess their role as part of the review.

Recommendation 9: The 2002 review of the National Greenhouse Strategy should include an analysis of the effectiveness of current consultation and coordination mechanisms between the Commonwealth (and the AGO in particular) and the States/Territories. The role of Ministerial Councils in the implementation of the National Greenhouse Strategy should also be assessed as part of the review.

6.3.3 Industry, scientific community and environmental NGOs

A common issue raised by industry was a view that the AGO needs to consult with them more. While it is unquestionable that industry needs to be consulted in policy development and implementation and in the delivery of particular AGO programs, their expectation of detailed consultation on program design and delivery is too high. It would be advantageous to engage industry attention on other parts of the AGO's mandate such as longer term delivery of climate change outcomes and meeting Australia's international obligations.

Similarly, other important stakeholders such as environmental organisations feel a frustration at the level of meaningful engagement in the work of the AGO, particularly in the broader policy agenda.

However, overall it is felt that the AGO takes stakeholder consultation seriously and makes genuine attempts to engage a broad range of private stakeholders and the public more generally. It has a number of formal mechanisms to do this, but these deal with specific programs (eg Greenhouse Challenge or National Carbon Accounting System) or issues (greenhouse science). What is lacking is a broad-based advisory group that provides advice to the AGO on policy options and future strategic directions.

Recommendation 10: A small advisory group should be established to provide greenhouse advice to the Chief Executive Officer of the AGO and the Secretaries Sustainable Environment Committee. The group would be chaired by the Ambassador for the Environment, with terms of reference and other membership to be agreed by the Secretaries Sustainable Environment Committee. Members should represent industry, environment and the scientific community. Possible members could be: representatives from CSIRO, the head of the Greenhouse Science Advisory Committee, the Bureau of Meteorology, the Australian Industry Greenhouse Network and the Climate Action Network (or similar broadly representative industry and environmental organisations). The AGO would provide Secretariat services to the advisory group.

Figure 5: Proposed Governance and Consultation Framework for the Australian Greenhouse Office

Figure 5: Proposed Governance and Consultation Framework for the Australian Greenhouse Office