Climate change challenges dismissed by the Federal Court

The Federal Court has dismissed two judicial review proceedings in its recent decision of Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2)¹ regarding the climate change effects of scope 3 coal mine emissions to matters of national environmental significance (MNES) under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) (the Act).

Background and decisions challenged

The Applicant, the Environmental Council of Central Queensland (ECCQ), sought to challenge the decision of the Federal Environmental Minister (Minister) to extend the operations of two NSW Coal mines at Narrabri and Mt Pleasant, Bengalla.

Specifically, the ECCQ sought judicial review of its request for the reconsideration and revocation of the ministerial decision that the proposed mine expansions constituted controlled actions under the Act.

The ECCQ provided considerable new scientific material concerning the impacts of greenhouse gas (GHG) emissions on climate change, which the Minister accepted met the threshold for reconsideration of the decision under section 78 of the Act.²

Minister’s determination

The Minster decided not to revoke her original controlled action decision, despite accepting the overwhelming evidence that:

• anthropogenic (human-induced) scope 3 (indirect) emissions would impact on MNES; and
• that the combustion of coal and/or gas results in GHG emissions which increase climate change effects that will, in turn, adversely impact MNES.³

In confirming her decision, the Minster turned to the indirect impact requirement under section 527E of the Act and determined that the indirect impacts of the proposed projects were not “a substantial cause of the stated physical effects of climate change” on MNES because:

1. the proposed action would not cause any net increase in global GHG emissions; and
2. even if the actions resulted in increased emissions, the increase would be very small.⁴

In support of her conclusion, the Minister identified multiple netting variables including:

• that generated scope 3 emissions may be offset, mitigated or abated by the implementation of policies or regulations in other countries in which the coal is used;
• the countries where it is anticipated that the mined coal will be used each have national climate change commitments;
• the level of GHG emissions will likely be subject to emission reduction policies of consuming corporations; and
• without the proposed action, global GHG emissions may not be affected as the required coal may be sourced elsewhere.⁵

Court’s findings

ECCQ argued that, having found that additional GHG emissions would lead to global warming, the Minister was not entitled to consider the netting off variables to emissions that the proposed action would likely have from total global GHG emissions. Justice McElwaine held that the ECCQ’s contention failed because the reasoning process it proposed lacked statutory expression under the Act.⁶

Specifically, His Honour held that the Act does not contain an express requirement that compels the Minister to reason in any specific way in order to be satisfied pursuant to s 78(1)(a) that revocation and substitution of a controlled action decision made under section 75 of the Act is warranted by the availability of new information.⁷

Statutory Context

In deciding whether to approve a project, section 75 of the Act requires the Minister to determine if the proposed action is a controlled action. In doing so, the Minister must consider all adverse impacts the proposed action will have, or is likely to have, on MNES⁸. When the impact is indirect, section 527E(1)(b) of the Act requires it to be a ‘substantial cause’.

Justice McElwaine held that the EBPC Act leaves the ‘substantial cause’ inquiry open for the Minister’s assessment,⁹ and in doing so, neither expressly requires nor restricts the consideration of counterfactuals (variables) in the Minster’s assessment.¹⁰

Further, the Court considered that the Minister’s decision was neither illogical nor irrational in finding that “she was not satisfied” that the proposed actions are “likely to result in net increase” of anthropogenic GHG or the extent to which MNES will be impacted by the physical effects of climate change. That the material relied upon by the Minister provided a rational basis for the Minister’s findings, and the Minister’s reasons were intelligible and explained.

Accordingly, the Federal Court held that it was open to the Minister to determine that any increase in global GHG emissions produced by the proposed action would not constitute a ‘substantial’ cause of the adverse impacts on climate change.¹¹ The Federal Court concluded that it was therefore legally valid for the Minister to confirm her controlled action decisions and dismissed both proceedings.¹²

Implications

It is important to highlight that this case concerns the legality of the Minister’s decisions. That is, the Court was not concerned with the merits of ECCQ’s argument or the validity of the science provided in support. Rather The Court was concerned with whether it was legally open to the Minister to conclude in the manner that she did. This case is therefore unlikely to provide significant precedential value into the likelihood of further GHG producing projects being approved.

The judgment however interestingly contrasts to the landmark NSW Land and Environment Court decision of Gloucester Resources Ltd v Minister for Planning [2019] NSWLEC 7 (Rocky Hill). Amongst Preston CJ’s reasons for refusing a proposed coal mine in the Rocky Hill case was the likely contribution the mine would have to downstream Scope 3 GHG emissions.

Whilst the link between downstream anthropogenic GHG emissions and climate change effects has largely been accepted, recent decisions and legislative restrictions surrounding climate change decision-making powers make for an uncertain future judicial landscape in this area.

Ultimately, as the Federal Court commented in this case, “whether the Minister’s powers should be exercised to explicitly consider the anthropogenic effects of climate change”, is a matter for Parliament’s consideration¹³.

This article was written by John Paul Merlino, Partner, Mark Etherington, Partner and Vanessa Samaras, Solicitor.

¹Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208.
²Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [30].
³Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [31].
⁴Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [33].
⁵Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [69]
⁶Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [70]-[71].
⁷Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [71].
⁸Environmental Protection and Biodiversity Conservation Act 1999 (Cth) s 75(2)(a).
⁹Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [77].
¹⁰Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [79].
¹¹Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [155].
¹²Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [4].
¹³Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [7].