The emergence of climate change law in New South Wales and beyond

In the recent NSW Land and Environment Court decision of Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7 Chief Judge Preston, in performing the role of the consent authority of a development application for a proposed open-cut coal mine, has for the first time in an Australian Court found that the greenhouse gas (GHG) emissions of the development and the associated impacts on climate change was a ground for refusal of the application.

The facts

GRL had proposed an open cut coal mine, the Rocky Hill Coal Project, to produce 21 million tonnes of coal over a 16 year period. The proposed coal mine was located close to the town of Gloucester, NSW. The coal product to be produced from the mine was to be coking coal with a maximum ROM coal production of 2 million tonnes per annum, a relatively small mine by industry standards.

The Planning Assessment Commission (PAC), under delegation from the NSW Minister for Planning, refused the development application. GRL then appealed this decision to the Land and Environment Court in its merit appeal jurisdiction. Merit appeals of mining projects are extremely rare in NSW as almost all projects are the subject of public hearings during the development application assessment process, which in turn extinguishes merit appeal rights. However in this case the Minister for Planning did not request the PAC to conduct a public hearing, thereby leaving the door open to GRL to commence merit appeal proceedings.

The development application was refused by the PAC primarily due to an inconsistency of the proposal with the objectives of the zoning of the land, the significant visual impacts of the mine and that the project was not in the public interest. Notably, the predicted GHG emissions of the project and any resulting impact on climate change was not a reason for refusal by the PAC.

However in the appeal, Gloucester Groundswell, represented by the Environmental Defenders Office NSW (EDO) applied for, and was successful in, being joined as a party to the proceedings. The joinder was primarily on the basis that Gloucester Groundswell would raise two issues that would not otherwise be sufficiently addressed in the proceedings, namely unacceptable social impacts on the community of Gloucester and the impact of the development on greenhouse gases. In relation to greenhouse gases, the EDO stated in its joinder application that it sought to present to the Court (which it then in fact did in the substantive proceedings) that a key requirement of the public interest and the principles of ecologically sustainable development (ESD) is to ensure that, in order for development approvals to be granted, a decision maker must be satisfied that the project, in combination with other proposed developments around the world, will not infringe the commitments made in the Paris Agreement.

Consent for the Rocky Hill Coal Project was ultimately refused by the Court as Preston CJ found that approving the Project would adversely impact the visual amenity and rural and scenic character of the valley, the community and the existing, approved and likely preferred uses of the land in the vicinity of the proposed mine. Whilst his Honour held that the project should be refused based on these impacts alone, he also held that ‘GHG emissions of the project and their likely contribution to adverse impacts on the climate system, environment and people adds a further reason for refusal.’ It is this additional reason for refusal, and his Honour’s reasoning in coming to this conclusion, that has made this judgment particularly controversial.

In relation to GHG emissions, his Honour’s reasoning can be summarised as follows:

• In considering impacts of a proposed development on the environment and in consideration of principles of ecologically sustainable development, both direct and indirect GHG emissions should be considered, as should consideration of climate change.
• It does not matter that the emissions of the project may represent only a small fraction of the global total of GHG emissions. The global problem of climate change needs to be addressed by multiple local actions.
• There is a causal link between the project’s cumulative GHG emissions and climate change and its consequences. The exploitation and burning of a new fossil fuel reserve cannot assist in achieving the rapid and deep reductions in GHG emissions that are necessary in order to achieve the 2 degree goal in the Paris Agreement. In coming to this conclusion, his Honour endorsed the ‘carbon budget’ approach in estimating the level of GHG emission reductions required to meet the Paris Agreement targets and the required ‘peaking year’ for emissions before starting a downward trajectory.
• GRL’s arguments for why the project should be one of the fossil fuel projects allowed (notwithstanding the carbon budget) were rejected on the basis that there was no specific proposal to offset the project’s emissions, assumptions regarding carbon leakage were unproven and GRL’s arguments around market substitution were rejected.

The rejection of GRL’s submissions in relation to market substitution and carbon leakage by the Court was contrary to previous case law in Queensland[1] and at a Federal level where Courts have accepted such arguments. In addition it has previously been accepted by the Courts that due to the speculative nature of the estimation of scope 3 emissions (which are outside the proponent’s control) and the number of variables involved, it was difficult to identify a causal relationship between a particular mining project and climate change[2]. Additionally the Paris Agreement and other similar policies or targets cannot meaningfully guide the task of the consent authority as they are not targets capable of application by a consent authority[3].

What does it all mean and what now?

It is important to remember that this was not a case decided wholly (or substantially) on the issue of climate change. That was a finding separate to the primary submissions and justifications of refusal of consent, and is not binding on consent authorities in assessing and determining future planning applications.

However, the decision creates a significant amount of uncertainty in how it will now be interpreted by other consent authorities and government agencies (in NSW and beyond) who are responsible for, or have a role in, the assessment of high intensive GHG emission projects. Whilst this decision focuses on coal mining projects, the reasoning of the Court which is largely based on Australia’s commitments under the Paris Agreement and the ‘carbon budget’ approach, would apply equally to other intensive GHG emissions projects such as gas, energy, manufacturing, construction and agriculture. 

Whilst consideration of indirect (or scope 3) emissions in the planning approvals process is nothing new, the decision of Preston CJ has changed the landscape of how decision makers may assess the direct and indirect GHG emissions and potential impacts on climate change resulting from a project. It also raises questions about the weight to be applied by consent authorities to considerations of GHG emissions and any potential ‘causal link’ to climate change in determining planning approval applications.

The decision may yet be the subject of an appeal to the NSW Court of Appeal. However it seems clear that in the absence of an appeal, or even if an appeal is commenced, that legislative or policy intervention is likely to be required to resolve the current uncertainty created by this decision.

In the meantime, proponents of current or future planning approval applications should consider the decision carefully, including what approach they may wish to take in tackling the issues raised by the Court in coming to its conclusions on climate change impacts.