The High Court hears climate arguments for the first time in MACH Energy v DAMSHEG

Last week, the High Court of Australia heard its first ever climate change case. At its heart is a simple question with far‑reaching consequences: when deciding whether to approve a coal mine project in New South Wales, must a planning authority consider the project’s likely climate change impacts on the local environment?

The Court’s ruling will guide how climate change impacts are considered in planning decisions across Australia.  The case is also the first time last year’s International Court of Justice’s Advisory Opinion on climate change will be considered by the High Court, and considers the possibility of attributing climate impacts to specific sources of greenhouse gas (GHG) emissions.

Background

The case concerns MACH Energy’s proposed expansion of its Mt Pleasant coal mine (the project) in the Hunter region of NSW. In 2022, the Independent Planning Commission (IPC), the expert panel that decides major projects in the state, approved the expansion to increase production from 10 million to 21 million tonnes of coal per year until 2048.

Local community environmental group, Denman Aberdeen Muswellbrook Scone Healthy Environment Group (DAMSHEG) challenged that decision in the NSW Land and Environment Court on several grounds. Importantly, DAMSHEG argued that the IPC had failed to consider the likely environmental impacts in the region of around 98% of the project’s forecast GHG emissions, which are produced when the coal from the project is ultimately burned (known as “scope 3” emissions). In its decision, the IPC accepted that the project’s scope 3 emissions would contribute to anthropogenic climate change and that the cumulative impact of those emissions would be felt globally. The IPC also referred to Australia’s obligations under the Paris Agreement, noting the project’s scope 3 emissions would be accounted for in emissions inventories of the countries where the coal is consumed.

The first instance judge dismissed the appeal, however the NSW Court of Appeal later set aside the IPC approval.  The Court (Ward P, Price AJA agreeing, Adamson JA agreeing and writing separately) held that the IPC failed to consider a mandatory statutory consideration, being the environmental impacts of the project in the locality. It said consideration was required of how the project contributes to global climate change through GHG emissions, and how climate change may in turn affect the local environment and community during the life of the project.

MACH Energy is now asking the High Court to overturn that decision, which has drawn the attention of several interveners also seeking to be heard on the subject, demonstrating the significance of the case. The High Court granted leave for the following groups to provide submissions as amici curiae or ‘friends of the Court’ on the basis of their expertise in the area:

1. US-based non-government organisation the Union of Concerned Scientists (UCS);

2. The Centre for Climate Engagement at Hughes Hall, University of Cambridge and the Sabin Center for Climate Change Law at Columbia Law School (Sabin Center);

3. The Melbourne Climate Futures initiative at the University of Melbourne (MCF).

Arguments before the High Court

The grounds of appeal brought by MACH Energy turn on the interpretation of s 4.15(1)(b) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act):

(1) Matters for consideration—general in determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application—

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality

Do impacts in the locality have to be considered?

MACH Energy contended that the Court of Appeal erred in construing s 4.15(1)(b) of the EPA Act as requiring consideration of the environmental impacts of a development on the built and natural environment “in the locality”. MACH Energy argued that, as a matter of sentence structure, the words “in the locality” qualify only the social and economic impacts, not the environmental impacts.

Secondly, MACH Energy said s 4.15(1)(b) requires consideration of impacts only to the extent that they are relevant. It argued the IPC did consider the impacts of the project’s GHG emissions on global climate change, but did not regard the flow-on impacts of climate change (for example, increased risk of bushfire and extreme weather events) to be separately relevant.

In reply, DAMSHEG submitted that in order to consider likely impacts on the environment under s 4.15(1)(b), the IPC was required to consider impacts on the vicinity of the project. It argued that the Environmental Impact Statement (EIS) submitted to the IPC identified likely climate-related impacts in the Hunter region including bushfires, droughts and flooding, and that these should have been taken into account in determining the expansion application. To the extent the EIS discussed bushfires and extreme weather, MACH Energy argued it was concerned with the potential impacts of climate change on the project, rather than the impacts of the project, which did not specifically address the impacts in NSW.

MCF added that s 4.15(1)(b) required consideration of both climate system as a whole as well as localized impacts. DAMSHEG and MCF contended that assessing the likely impacts of the development required the IPC to consider the full chain of consequences, including the further impacts of an altered climate system on other components of the natural environment. They argued that, instead, the IPC had stopped at the first stage by looking only at global climate impacts.

At the hearing, the High Court devoted considerable time to examining the proper construction of s 4.15(1)(b). One issue it raised was where to draw the line in assessing environmental impacts: for example, is the IPC required to consider all global consequences such as the melting of polar ice caps, or would this only be needed if the project’s environment was low-lying?

Can impacts in the locality be considered?

Finally, MACH Energy submitted that the impacts of the project’s emissions could not be attributed to local impacts in the Hunter region, because they form part of a global problem caused by the accumulation of GHG emissions worldwide. It submitted that other courts had rejected that attribution science could establish such specific causal linkages.

On causation, DAMSHEG argued that MACH Energy had not put causation in issue in the court proceedings below, and that the evidence before the IPC regarding climate change impacts on NSW and the Hunter region had been uncontested. In any event, DAMSHEG submitted that the evidence of its expert, Professor Penny Sackett, established a sufficient causal link between the project’s emissions and likely impacts in the vicinity, given the cumulative impact of GHG emissions. Every source of GHG emissions, including the project, consumes the remaining carbon budget consistent with limiting global warming to 1.5° C above pre-industrial temperatures (as identified by the Paris Agreement in 2015). MCF and the Sabin Center referred the Court to overseas authorities addressing causal links in climate litigation, and noted the ICJ Advisory Opinion observation that establishing a causal connection between wrongful acts or omissions and climate-related harms is not impossible. The Court showed interest in the ICJ Advisory Opinion and its consideration of climate causation issues at the hearing. Courts across the world are increasingly being asked to grapple with the law of causation when it comes to GHG emissions and climate impacts, and the ICJ Advisory Opinion is the highest authority on the matter to date.

Both MCF and UCS further submitted that developments in attribution science now support drawing links between individual projects and specific climate impacts. UCS explained the distinction between event attribution science, which connects emissions to particular weather events such as the 2019-2020 Black Summer bushfires; and source attribution science, which can quantify the contribution of emissions into the atmosphere from particular projects or places. UCS argued that the special leave granted to MACH Energy to bring the causation ground of appeal should be revoked, because the factual record in this case is inadequate to resolve the causation issue.

What could the outcome mean?

The Court has reserved its judgment, meaning a decision would likely come later in the year.

As fossil fuel corporations and environmentalists alike await the reasons, it is worth considering the implications of the case. If MACH Energy is successful in overturning the NSW Court of Appeal, then companies can apply to extend fossil fuel operations in that state without regard for the GHG emissions impact on the local environment. The Mt Pleasant extension would go ahead.

If, on the other hand, DAMSHEG are successful in upholding the decision, then the Mt Pleasant extension application would be returned to the IPC to give consideration to the project’s impacts on the Hunter region.

The extent to which the High Court adopts or rejects the development of attribution science will be of critical interest to other climate change cases across the country and the world.

We will provide updated analysis once the Court’s decision is given.