"Lake Macquarie residents are becoming aware of climate change issues and the underlying causes," the report released this week said.

"With this in mind, the council will shift its organisational direction and provide further resourcing into new and existing sustainability initiatives."

The report said the council was "taking a lead role in planning for sea-level rise due to climate change" and had committed to a target of reducing greenhouse gas emissions in the city by 3 per cent a year.

The council's environmental risk team leader Alice Howe said there were signs of people changing their behaviour to help the environment.

Uptake of green power was increasing and people were buying smaller cars. The report said 161,535 vehicles were registered in Lake Macquarie, a 2.25 per cent increase on the previous year.

The rate of native vegetation clearing had been "substantially reduced" to 58 hectares in 2007-08, compared with 368 hectares in 2006-07.

Dr Howe said that was "partly due to planning controls we have adopted, but there is an economic component as well".

The reduced rate of land clearing may be temporary, with Lake Macquarie's population expected to grow by 60,000 to 70,000 people in the next 25 years. This is expected to create demand for 36,500 new dwellings.

"An expanding population means an increase in the consumption of resources such as energy," the report said.

Residential electricity use in the city had decreased by 3.9 per cent in 2007-08 compared with the previous year, but business electricity use had increased by 1.8 per cent.