Photo of scenic Gloucester Valley by Groundswell Gloucester

By Dena Adler

A groundbreaking ruling will break no new ground for a proposed Australian coal mine. On February 8, 2019, the Land & Environment Court of New South Wales upheld the government’s denial of an application by Gloucester Resources Limited to construct an open cut coal mine in New South Wales (NSW). The proposed Rocky Hill Coal Project aimed to produce 21 million tonnes of coal over a period of 16 years. The court determined the project was not in the public interest after weighing the social and environmental costs of the project, including an extended consideration of how the project would worsen climate change.  While the decision’s specific legal context may limit its exact replicability, the decision to uphold a permit denial on the basis of negative climate change impacts, could bolster climate suits around the world. This blog provides a quick review of the case and its noteworthy developments.

An Overview of the Case

The Department of Planning denied the Rocky Hill Coal Project application in December 2017, after reviewing the associated environmental impact report. Gloucester Resources Limited promptly appealed the decision. In court, the Minister of Planning and a local community action group called Gloucester Groundswell Inc. defended the government’s denial of the permit. The Minister for Planning and Groundswell argued that the Rocky Hill Project application should be denied on several grounds including that approving the Rocky Hill Coal Project worked against the public interest because the project’s associated greenhouse gas emissions will contribute to climate change in a manner “contrary to the principles of ecologically sustainable development.”

Section 4.15(1) of Australia’s Environmental Planning & Assessment Act (the EPA), obligates the government to consider the public interest as part of its review of a development application. As part of its consideration of climate change impacts, the court held that both upstream and downstream emissions of the project should be considered by the Planning Department because the EPA and its regulations require consideration of “the principles of ecologically sustainable development” (“ESD”) which can encompass climate change impacts. The court also pointed to the requirements under the EPA to consider “any environmental planning instrument” or “development control plan” and cited language in the State Environmental Planning Policy (Mining, Petroleum  Production and Extractive Industries) of 2009 and the 2010 Gloucester Local Environmental Plan as including consideration of ESD and the cumulative greenhouse gas emissions associated with a project.

After weighing the costs and benefits of the project, the court upheld the government’s denial of the application, finding “that the negative impacts of the Project, including the planning impacts on the existing, approved and likely preferred land uses, the visual impacts, the amenity impacts of noise and dust that cause social impacts, other social impacts, and climate change impacts, outweigh the economic and other public benefits of the Project.” While not foreclosing all mining projects, the court ruled that this project was not a “sustainable use” because of the combination of climate change impacts of the project and the high environmental and social costs of constructing a coal mine in this particular location.

In the ruling, Chief Judge Preston boiled this logic down to the idea that this project would be “in the wrong place at the wrong time.” He explained,

“Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. 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.”

Given the limitations of the global carbon budget, he suggested that only a limited number of fossil-fuel development projects can proceed and used a balancing test to determine which projects may have benefits justifying the costs.

Four Key Takeaways

  1. Climate Change Was Recognized as Grounds for the Denial

Rather than simply requesting the company disclose information related to production of greenhouse gas emissions, the court weighed the impacts of climate change as part of its balancing test to determine whether the project was in the public interest. In the U.S., government agencies have in some instances considered the costs and benefits of climate change during their environmental reviews and regulatory impacts analyses, and several courts have required agencies to give further consideration to the greenhouse gas emissions associated with a project; but these environmental review cases have typically not evaluated how climate change affects the public interest. Here, the Australian court factored downstream emissions into the public interest evaluation.

The Australian court conducted its analysis in the specific context of a “merits appeal” under NSW environmental planning legislation, which requires the court “to remake the determination” of the agency in weighing the merits of the development application; the court did not perform a judicial review of the legality of the agency’s decision similar to what we typically see in the United States and other jurisdictions. Nonetheless, the court’s decision reinforces the legitimacy of an agency denying a permit based on climate impact considerations. Particularly significant is the court’s recognition of downstream emissions and the valid connection between an individual permit denial and the global climate challenge, as discussed below.

  1. Consideration of Climate Change Impacts Included Downstream Emissions

The ruling considered the cumulative greenhouse gas emissions associated with the project, including the downstream emissions from the transportation and combustion of coal product from the mine. Given that the downstream emissions represent approximately 95% of the 38 million CO2-e (tonnes) estimated to be associated with the project, such a finding significantly enlarges the climate impacts associated with the project which in turn shapes the balancing test for the public interest. To support this conclusion, the court points to the legislation, regulation, planning documents, and principles of ESD discussed above. Interestingly enough, it cites not only Australian case law, but U.S. cases in which the courts struck down agency decisions for their failure to adequately consider or estimate downstream greenhouse gas emissions. While such a ruling has not blocked agencies in the U.S. from completing an emissions analysis and reapproving the project, as in the case concerning the Southeast Market Pipelines Project, here these U.S. decisions are used to bolster an Australian agency’s denial of a permit.

  1. Arguments Decoupling the Specific Project from the Global Climate Problem Were Rejected

The coal company failed to persuade the Australian court that the proposed project’s contributions to climate change constituted only a small portion of a global problem. The court cited the recent Urgenda decision rejecting the Dutch government’s argument that its contribution to climate change was relatively small.  In contrast, the tension between local and judicial action to address a global problem has recently proven to be more of a sticking point in U.S. federal courts considering municipal suits against fossil fuel companies for climate-related damages. The Australian court rejected arguments by appellants related to market substitution, carbon leakage, the theoretical possibility that other projects would offset the emissions of the Rocky Hill Coal Project, and the inefficiency of this denial as a mechanism for global abatement of emissions.

  1. Ruling Could Lift Next Wave of Climate Suits

The Rocky Hill Coal ruling can still be appealed to a higher court, but it marks a noteworthy development in the global climate change litigation landscape. While it’s true that courts do not have an obligation to consider the rulings of their international peers, the Rocky Hill Coal decision, in relying on cases from other countries, demonstrates how cases around the world can inform one another and incrementally advance progress in tackling climate change.

To view primary source documents and keep abreast of developments in this case and other international climate change litigation check out the Sabin Center’s Non-U.S. Litigation Database.

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