Gillard replaced fellow Labor politician Kevin Rudd in June, after he was ousted by the governing centre-left party. The coup was unexpected - as recently as last year, Rudd was still riding high in the polls as one of the most popular prime ministers in Australian history. Despite having once described climate change as "the greatest moral, economic and social challenge of our time", it was his reluctance to drive through a carbon pricing scheme that was the catalyst for his demise.
Rudd was catastrophically undermined by his decision, in April, to shelve his government's flagship climate-change policy, called the Carbon Pollution Reduction Scheme (CPRS), which included a modest emissions trading scheme (ETS).
The Australian Labor Party does not control parliament's upper house and the Senate rejected the climate bill twice last year and again in February. Rudd's climb down on climate change, his great "moral challenge", in the face of Senate opposition, was seen as an act of gross political cowardice.
Gillard has signalled that her top three priorities would be those that were widely seen to have brought down Rudd: the capitulation on carbon pricing, a controversial mining tax and a perceived failure to prevent an influx of asylum seekers.
Gillard, who faces an election on August 21, says she wanted to lead a government that "does more to harness the wind and the sun and the new emerging technologies". As Windpower Monthly went to press, Gillard was set to announce a new set of policies to win back the voters who left the party for the Greens after Rudd dropped the ETS.
But she has said that this will not include, in the first instance, a return to the CPRS. Rather she intends to stick to the timetable outlined by Rudd, which involves reviewing the nature of community consensus in Australia about the CPRS as well as the progress internationally on pricing carbon and combating climate change.
"It is as disappointing to me as it is to millions of Australians that we do not have a price on carbon," says Gillard. "If elected as prime minister I will re-prosecute the case for a carbon price at home and abroad. I believe the nation wants to reduce its carbon footprint, so we will be talking about that and speaking about what we can do in the lead-up to a decision in 2012."
In the meantime, Gillard appears likely to focus on renewable energy programmes and energy efficiency, with a new "sustainability agenda" set to become a key pillar of Labor's election campaign. The government has a A$650 million (US$564 million) pot allocated in the budget for new renewable energy and energy-efficiency programmes, with wind, solar and geothermal schemes likely to be the main beneficiaries.
But it is the ETS scheme that most critics - and energy companies - see as key to unlocking the nearly A$50 billion (US$44 billion) in investment needed in renewable power generation to enable Australia to reduce its carbon emissions by a minimum of 5% below 2000 levels by 2020, and potentially by as much as 25% - a target both main parties have committed to.
The centre-right opposition, a Liberal-National Party coalition, oppose the ETS, characterising it as a "tax on everything". Once a climate change denier, opposition leader Tony Abbott has now come to a pragmatic acceptance of the reality of climate change and the need to tackle emissions, but prefers the use of "direct action" through grants rather than a carbon price.
As Windpower Monthly went to press, polls showed Gillard's Labor Party holding a wafer-thin lead over the centre-right opposition.