Law sides with cli­mate change against coal

15 March 2019

Mining company, Gloucester Resources Limited (GRL), appealed to the Land and Environment Court of New South Wales, Australia, against a ministerial decision to reject its application to develop and operate an open cut coal mine, Rocky Hill, near Gloucester, New South Wales. On 8 February 2019, the Court dismissed the appeal. Significantly, among the several grounds on which the appeal was dismissed was that the construction and operation of the mine, and the combustion of the mined coal, would contribute unacceptably to climate change. In his decision, the Australian judge referred in support to the Dutch Court of Appeal decision in the Urgenda case, about which we reported here.

This article looks at this Australian judicial decision (Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7). In passing it may be worth noting the coincidental timing of another coal mine rejection on the opposite side of the world (this other instance relates to a very much smaller intended volume of coal production and is not further analysed in this article). The ENDs Report in March 2019 reported that a planning authority in South Wales, United Kingdom, refused planning permission to reopen a coal mine citing climate change as the reason in conjunction with Welsh law and policy in respect of the same.

Rocky Hill: the underlying decision (rejection)

The proposed coal mine project, in a “scenic and serene” rural valley, was estimated to last for 21 years and entail the extraction of 21 million tonnes of coal over 16 of these years. Consent for the application was refused in late 2017. This refusal did not include climate change related grounds. The refusal was made on planning type grounds which will be reasonably familiar across the world (e.g. the proposed project would contravene the objectives of the local environmental plans, would have a significant adverse local visual impacts and would not be in the public interest).

Rocky Hill: the appeal – the climate arguments

GRL appealed the rejection to the Land and Environment Court. A significant aspect of the appeal was that a non-for-profit association called Gloucester Groundswell Inc., formed by a group of concerned local residents, successfully applied to be joined as party to the appeal proceedings. The issues between the parties in the appeal included the traditional planning issues. However, Gloucester Groundswell also introduced arguments based on climate change.

Gloucester Groundswell contended that the proposed mining project should be refused because the greenhouse gas (GHG) emissions from the development and operation of the coal mine, and the subsequent burning of the produced coal, would hinder measures to limit anthropogenic climate change and be inconsistent with Australia’s international commitments under the Paris Agreement and with policy intentions to keep global temperature increases to below 1.5 to 2º C.

This article relates purely to the climate related deliberations of the judge. However, these should be put into context with the overall decision. The judge stressed that he would have dismissed GDR’s appeal solely on the basis of traditional planning type issues, including significant adverse planning, visual and social impacts of the project and the direct and indirect costs of the mine exceeding the benefits. So to this extent, strictly, the climate arguments might be unnecessary. However, there is no escaping the climate arguments. They make up a significant portion of the judgment are not merely incidental remarks. The judge states: “The GHG emissions of the Project and their likely contribution to adverse impacts on the climate system, environment and people adds further reason for refusal. Refusal of the project will not only prevent the unacceptable planning, visual and social impacts, it will also prevent a new source of GHG emissions….In short, an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time…..Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions. These dire consequences should be avoided. The Project should be refused.”

The judge also set out in detail the international treaty framework designed to address the problem of climate change, including the UNFCCC and the Paris Agreement, stressing that Australia is a party to both. He assessed the incompatibility of the proposed mining project with Australia’s Nationally Determined Contribution under the Paris Agreement to reduce its GHG emissions by 26-28% below 2005 levels by 2030. The judge concluded that the GHG emissions over the life of the proposed project would be sizeable, that they would directly contribute to the adverse impact on the climate system, that they would be incompatible with Australia’s emissions reduction target and that the refusal of the application on this ground therefore was justified.

GRL’s climate position – comprehensively dismissed

In his judgment the judge recorded that “GRL did not contest that climate change is real and happening and that anthropogenic GHG emissions must be reduced rapidly in order to meet the internationally agreed temperature targets of 1.5 to 2ºC. GRL did however contest that the Rocky Hill Coal Project needs to be refused in order to achieve these temperature targets”.

The judge recited at length GRL’s counter-submissions on climate change. He rejected them all (only some of these counter submissions are referred to here). GRL had submitted that neither the Paris Agreement, nor Australia’s national implementing legislation prohibited the development of new coal mines and that therefore it was not open to the court to interpret them as containing such a prohibition. GRL also contended that Australia enjoyed discretion in determining how to achieve its Nationally Determined Contribution (under the Paris Agreement) and that reducing coal extraction and combustion was not the only way for the country to meet its emission reduction target. Another argument (referred to as the market substitution argument) was that there was rising demand from the steel industry for the type of coal to be mined at Rocky Hill, and refusal to permit this project would result in that demand being satisfied by lower quality coal from other countries and this would result in an overall increase in net global GHG emissions, whilst at the same time depriving New South Wales of local benefits (such as employment connected with the mine).

The judge recognised that national and international legal frameworks on climate change do not contain express prohibitions against the development of new coal plants. However there was ample of authority from both Australian and foreign courts which establishes that the GHG emissions from a proposed project are a relevant consideration in the legal decision making process. The judge had little respect for GRL’s ‘market substitution’ argument (i.e. coal production would simply shift to another country). He rejected it on the (lack of) evidence (particularly as other countries also implement their own measures to reduce their GHG emissions and air pollution, including from coal), illogicality of the argument and other international case law which rejected such argument. In any event, the judge stressed (and supported by reference to Urgenda) that under the Paris Agreement, developed countries like Australia had accepted responsibility to “take the lead” in the global efforts to reduce GHG emissions. The judge was also satisfied on the basis of the expert evidence submitted to him that, although Australia has flexibility (under the Paris Agreement and its national legislation) over how to go about achieving its nationally determined contribution, it would be impossible for the country to reach its emissions reduction target whilst at the same time developing and utilising new coal reserves.

Comment

The Australian appeal was brought by a private sector company (GRL). The Dutch appeal was brought by the public sector (the Dutch Government). However in their endeavours to avoid judgment against them on climate change, both appeals raised similar arguments. These were rejected for similar reasons.

It would be prudent not to restrict reading of these cases to their particular facts or particular sectors. These cases potentially present signals (at least for the moment) on how courts in developed countries might respond to other high GHG emission projects and circumstances. There is however a note of caution to be made. We understand that the Urgenda decision is being appealed to the Supreme Court and perhaps GRL will appeal to a higher court in Australia. If so, it will be very interesting to see if the higher courts arrive at different decisions, and if so why.

Co-authored by Kamen Stoilov.