In The Reduction in Emissions

ANAO Report No.11 2014–15 The Award of Grants under the Clean Technology Program 96 indicators under the assessment of merit criterion one, the assessment of the primary merit criterion was inconsistent with the policy proposal for the programs. Specifically, the policy proposal identified that the programs were designed to deliver ‘transitional, targeted assistance for manufacturing companies’ that ‘will assist in achieving the objective of the carbon price by helping these businesses to reduce their energy consumption in the short‐term while remaining competitive in Australia’. The combination of the indicator scores resulted in a score which reflected a mixture of short‐ and long‐term benefits.

4.18 However,

as discussed in paragraph 4.5, indicator two was replaced, in assessing applications against merit criterion one, by grant funds per tonne of carbon abated, which is a relative cost‐effectiveness measure. In other grant programs audited by ANAO where the cost per unit is an important consideration in the award of funding, agencies have included a separate value for moneycost effectiveness merit criterion. 114 This approach provides greater clarity to applicants as to how the merit of their application will be assessed, and promotes a clear line of sight between the program objective and the key policy criterion or criteria.

4.19 The

department used the cost‐effectiveness indicator to assess applications against merit criterion one from the start of the programs, but did not communicate this to applicants until the fifth version of the customer guidelines December 2012. In this version of the customer guidelines, rather than identifying the cost‐effectiveness indicator as the second indicator used in the assessment of applications, the department identified this indicator as a factor that was taken into account. In June 2014, the department advised ANAO that: We took the view early in the program not to reference dollars per tonne in the customer documentation as we felt that this might drive applicants to artificially adjust their projects to achieve a “competitive” dollar per tonne figure. We were also cautious about managing customer messaging around what a competitive figure looked like. This is because there could be significant variation depending on the nature of the emissions reduction measure. However, due to customer feedback on this issue we included a clear 114 See for example ANAO Audit Report No. 25 2013–14, Management of the Building Better Regional Cities Program, and ANAO Audit Report No. 17 2012–13, Design and Implementation of the Energy Efficiency Information Grants Program.