Legal update: Rocky Hill - EDO NSW

GRL v Minister for Planning: a decision for the right place — at the right time

On 20 August 2018, a 15-year-old girl named Greta Thunberg sat alone outside the Swedish Parliament to protest government inaction on climate change.1  Her solitary school strike would spark a global movement of children striking for their futures.2  On the same day, on the other side of the world, a court convened in Sydney to begin the second week of a hearing into an application for an open-cut coal mine. The case would give rise to a landmark judgment on climate change in Australia.3

By Elaine Johnson, Principal Solicitor, Matt Floro, Solicitor, and Jasper Brown, Researcher, EDO NSW

Originally published in Australian Environment Review, Vol 34 No 2, April 2019

Addressing anthropogenic climate change was once primarily the domain of skilled negotiators at international conventions. But as emissions keep rising, and the effects of climate change are increasingly being felt locally, it is becoming an issue that permeates every aspect of society. The historic Paris Agreement4  sets the international goal of limiting global average temperature rise to well below 2 degrees Celsius above pre-industrial levels, and parties have committed to nationally determined contributions (NDCs) to reduce emissions under that agreement. The special report from the Intergovernmental Panel on Climate Change (IPCC) released in October 2018 makes it clear that in order to avoid catastrophic climate effects, such as loss of 99% of coral reefs globally, temperature rise must be limited to 1.5 degrees Celsius.5  That means a 45% reduction in CO2 emissions from 2010 levels by 2030 and net zero emissions by 2050. Yet the IPCC acknowledges that national commitments under the Paris Agreement will not get us there.6  Rapid phasing out of fossil fuels, including coal, will be necessary to avoid catastrophic climate change.7

So, children are taking to the streets, fearful for what their future holds. The United Nations Secretary-General is sounding the alarm and urging nations to act, telling a conference in New York that “we face a direct existential threat. Climate change is moving faster than we are”.8  The world’s best climate scientists are calling for “rapid, far-reaching and unprecedented changes in all aspects of society”.9  And communities around the world are taking climate science to the courts.

This article explores the recent judgment of the New South Wales Land and Environment Court (the Court) in Gloucester Resources Ltd v Minister for Planning10  (GRL v Minister), in which the Court rejected an application by Gloucester Resources Ltd (GRL) for approval of a greenfield open cut coal mine in the Gloucester Valley.11  In the 700-paragraph decision, Preston CJ concluded that GRL’s proposed coking coal mine is in the “wrong place” at the “wrong time”. The wrong place, because of the mine’s unacceptable impacts on Gloucester Valley, and the wrong time because it will increase greenhouse gas (GHG) emissions “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.”12

The judgment is significant because it is the first time in Australia (and perhaps the world) that climate change has been a basis on which a court has refused consent to a coal mine. Further, for the first time in Australia, a court accepted the urgent need to stay within the global carbon budget. For some, it appears controversial because it deals with an aspect of the environment that has traditionally been left to international players. However, as Preston CJ noted in the judgment:The global problem of climate change needs to be addressed by multiple local actions to mitigate emissions by sources and remove GHGs by sinks.13

While the decision in GRL v Minister is certainly groundbreaking, it is anything but radical. Rather, it is a logical development in the law that applies established legal principles to the science of climate change. Preston CJ’s reasoning is grounded on existing law that mandates consideration of the public interest, the principles of ecologically sustainable development (ESD) and impacts on climate change. It is a local decision addressing a global problem at a time when the window of opportunity to reduce emissions is rapidly closing. These factors make GRL v Minister a decision for the right place and, critically, at the right time.

Gloucester_courtesy_of_Groundswell_Gloucester_720.jpg

Background

GRL lodged an application for the Rocky Hill Coal Project on 18 December 2012, as amended on 11 August 2016 (Project). The Project aimed to produce 21 million tonnes of run-of-mine coking coal over 16 years.

After the Department of Planning and Environment (Department) recommended refusal of the Project, the (then) Planning Assessment Commission (PAC), as the Minister’s delegate, refused consent for the Project on 14 December 2017. The PAC’s reasons were the Project’s direct contravention of zoning objectives, significant visual impact and the public interest.

GRL filed a merits appeal in the Court under s 97 (now s 8.7) of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) on 19 December 2017. In April 2018, Groundswell Gloucester Inc (GG Inc), a not-for-profit community group, was successfully joined as a party to raise contentions relating to the Project’s unacceptable social impacts and impact on GHGs.14

An analysis of Preston CJ’s “wrong time” and “wrong place” findings in GRL v Minister follows.

“Wrong time” findings

GG Inc contended that the Project should be refused because:

… approval of the Project at the current time is not in the public interest and contrary to the principles of ESD, in particular the principles of intergenerational equity and improved valuation, pricing and incentive mechanisms, because the … [GHG] emissions (Scope 1, 2 & 3) from the proposed development would adversely impact upon measures to limit dangerous anthropogenic climate change. The effects of carbon in the atmosphere arising from the activities in the Project site, and the burning of the coal extracted from the mine, are inconsistent with existing carbon budget and policy intentions to keep global temperature increases to below 1.5° to 2° Celsius (C) above pre-industrial levels and would have a cumulative effect on climate change effects in the long term.15

GG Inc’s evidence about climate change and the carbon budget was adduced by Emeritus Professor Will Steffen, who opined that the carbon budget approach was “the most robust way to determine the rate of emissions reductions required to meet the goals of the Paris accord.”16  The carbon budget “limits the cumulative amount of additional CO2 emissions that can be allowed consistent with the Paris accord.”17  Notably, the carbon budget is based on “actual emissions”, not “net emissions”.18

Professor Steffen stated that globally, there is room for only around 215 Gt C (gigatons (billion tonnes) of carbon, emitted as CO2) in the carbon budget before it will be exhausted. At the present rate of emissions (10 Gt C per year), the carbon budget will be exhausted in 21 to 22 years.19  Accordingly, Professor Steffen opined that fossil fuel combustion must be phased out quickly and no new fossil fuel development (including the Project) was consistent with the carbon budget approach.20  As Professor Steffen stated in oral evidence: “it doesn’t take an Einstein to work that out, that you cannot reduce emissions by increasing them.”21

GG Inc’s evidence about policy, technological, financial and carbon market changes within the context of climate change was adduced by carbon finance analyst Tim Buckley. Mr Buckley opined that:

… the inconsistency between the current insufficient policy framework and the commitments made by the international community to limit global temperature increases to between 1.5-2.0°C above pre-industrial levels means there will be a material global market disruption to historic practices as energy markets and industries are forced to re-align.22

Importantly, Mr Buckley stated that based on the International Energy Agency’s forecasts, “there is sufficient existing production capacity, in operation or already approved and under development, to meet current and likely future market demand for coking coal”.23

Preston CJ largely accepted Professor Steffen’s and Mr Buckley’s evidence, although his Honour noted that there was “no proscription on approval of new sources of GHG emissions, such as new coal mines”.24  Nevertheless, his Honour dismissed GRL’s four main submissions as to why coal from the Project should be allowed to be exploited and burned. In doing so, the Court accepted the carbon budget approach, and tackled arguments commonly used to defend new fossil fuel developments, even as the carbon budget rapidly approaches its limit.

First, Preston CJ rejected GRL’s argument that the carbon budget would not necessarily be exceeded, because reductions in emissions or increases in the removal of GHGs by sinks could “net out” the Project’s GHG impact.25  His Honour stated that this was “speculative and hypothetical” and there was “no evidence before the Court of any specific and certain action to ‘net out’” the Project’s emissions.26  The Court approached the question of emissions offsets in the same way that any other kind of proposed offsetting might be approached. That is, to first establish that the proponent will actually provide the offset, which was not the case here.

Second, Preston CJ rejected GRL’s argument that refusing approval to the Project would not achieve abatement of GHG emissions at least cost. His Honour stated that the Court was “not formulating policy as to how best to make emissions reductions to achieve the global abatement task” in assessing the Project.27  Rather, if the Court determined that a development was unacceptable because of impacts on climate change, “it would not be rational to nevertheless approve the development because greater emissions reductions could be achieved from other sources at lower cost by other persons or bodies.”28

Third, Preston CJ rejected the so-called market substitution or drug dealers’ defence,29  which was used by GRL to claim that the Project’s GHG emissions would occur regardless of whether the Project was approved. GRL argued that coking coal would be sourced elsewhere because of its limited substitutes, resulting in at least the same amount of emissions.30  His Honour found there was no certainty market substitution would occur as countries were increasingly acting to combat climate change and air pollution.31  Further, there was no evidence about the existence and effect of market forces on substitutability.32  His Honour added that the argument was illogical:

The potential for a hypothetical but uncertain alternative development to cause the same unacceptable environmental impact is not a reason to approve a definite development that will certainly cause the unacceptable environmental impacts.33

Referring to the Dutch Urgenda Foundation v The Netherlands34  decision, Preston CJ rejected the “carbon leakage” argument that coal mining could move to countries with less stringent climate change policies, leading to an increase in emissions. His Honour found no evidence that carbon leakage would occur. Further, the Court accepted the joint expert evidence of Mr Buckley and Mr Manley, GRL’s geology expert, that:

… there were other coking coal mines, both existing and approved, in Australia that could meet current and likely future demand for coking coal, including coking coal with the properties of the coal from the Project.35

Fourth, Preston CJ rejected GRL’s argument that the Project’s GHG emissions were justifiable because the Project was a coking, not thermal, coal mine. In finding that GRL “overstated” this argument, his Honour found that “it is not necessary to approve the Project in order to maintain steel production worldwide” because of existing and approved mines.36

Accordingly, Preston CJ determined that the Project’s GHG emissions supported refusal of the Project. His Honour considered the Project’s Scope 3 emissions (ie, emissions resulting from transportation and combustion of product coal) were relevant considerations as they were part of GRL’s own environmental impact statement.37  Significantly, consideration of Scope 3 emissions was required by cl 14(2) of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW) (Mining SEPP) and s 4.15(1)(b) of the EP&A Act,38  and was consistent with existing case law.39

Preston CJ recognised that all of the “direct and indirect GHG emissions of the … Project will contribute cumulatively to the global total GHG emissions.”40  His Honour stated that, in line with existing case law,41  it “matters not that this aggregate of the Project’s GHG emissions may represent a small fraction of the global total of GHG emissions.”42

Significantly, drawing on the science in Prof Steffen’s carbon budget approach, Preston CJ found a “causal link” existed between the Project’s cumulative GHG emissions and global climate change.43  His Honour stated that:

… approval of the Project … is … likely to run counter to the actions that are required to achieve peaking of global GHG emissions as soon as possible and to undertake rapid reductions thereafter in order to achieve net zero emissions.44

In the result, Preston CJ did not promulgate a “policy decision” of no new fossil fuel development. Rather, his Honour determined that the better approach to evaluating a fossil fuel development was to consider the impact of the development on climate change, as well as other impacts, in “absolute” or “relative” terms:

  • In absolute terms, a fossil fuel development may be:

… a sufficiently large source of GHG emissions that refusal of the development could be seen to make a meaningful contribution to remaining within the carbon budget and achieving the long term temperature goal.45

  • In relative terms:

Other things being equal, it would be rational to refuse fossil fuel developments with greater environmental, social and economic impacts than fossil fuel developments with lesser environmental, social and economic impacts.46

Accordingly, his Honour held that the Project demonstrated “poor environmental and social performance in relative terms.”47  Although the Project was not one of Australia’s largest coal mines, it had unacceptable planning, visual and social impacts — with such impacts alone justifying refusal. In the Court’s weighing of relative impacts, the Project’s impacts on climate change added a “further reason” for rejection,48  particularly considering the urgent need to stay within the carbon budget in order to limit global temperature rise. These negative impacts were not outweighed by the purported economic benefits, which his Honour found were “substantially overstated”.49

“Wrong place” findings

Planning

The Minister’s primary contention as to why the Project should be refused was the incompatibility of the mine with other land uses in the Project’s vicinity, in contravention of cl 12(a) of the Mining SEPP and the Gloucester Local Environmental Plan 2010 (NSW) (GLEP 2010).

Preston CJ found that the existing land uses in the vicinity of the Project included residential, tourism, agribusiness and agriculture and uses associated with the township,50  while approved uses related to dwellings and commercial premises.51  His Honour accepted evidence regarding land use trends and likely preferred uses in Gloucester, gleaned from historical progressions in planning instruments and strategies. For example, while the Gloucester Local Environmental Plan No 4 of 1984 aimed to “provide for the orderly expansion of urban development arising from mining projects”, the objectives of GLEP 2010 emphasised the promotion of the principles of ESD, conservation of biological diversity and recognition of the cumulative impacts of climate change.52

Preston CJ determined that the Project was incompatible with the existing, approved or likely preferred uses and would have a significant impact on the likely preferred uses in the vicinity of the Project. These findings were due to the Project’s visual, amenity and social impacts, which could not be ameliorated by GRL’s proposed mitigation measures.53

Visual

The Minister’s secondary contention was that the residual visual impact of the Project would be significant throughout all stages of the Project.

Preston CJ accepted evidence that the landscape within the Project’s visual catchment was of high visual quality and high landscape values, and importantly made findings regarding the cultural significance of the landscape to Aboriginal people.54  Further, the land uses in the vicinity had high visual sensitivity to changes in the landscape caused by the Project.55

His Honour determined that the “combined impact of a high visual effect with high visual sensitivity is a high visual impact”, incompatible with existing, approved or likely preferred land uses.56  There would be “dynamic visual impacts” for people travelling to Gloucester,57  and a “considerable risk of total or localised failures of the vegetation” on the large “amenity barriers” that were proposed to shield the Project from view.58  The permanent overburden emplacements were “even more massive” and would “be visible as additional man-made features”.59

Social and amenity

GG Inc and the Minister contended that the Project would have a significant social impact on the community of Gloucester, contrary to the public interest and the principles of ESD.

The Court determined the Project’s social impacts using the Department’s 2017 Social impact assessment guideline For State significant mining, petroleum production and extractive industry development (Guideline).60  His Honour took into account community responses and lay objections to the Project, which are an element of the public interest.61

In considering the Guideline, Preston CJ found, among other things, that:

  • the “moderate positive social impact of the mine on local employment and the local economy may, however, be countered by negative social impacts”62
  • a “large majority of the community oppose the Project”63
  • the Project would “severely impact on people’s sense of place”,64 topophilia65  and psychoterratic relationships,66  resulting in an “extreme” social risk rating67  and social impacts of solastalgia68
  • the social risk rating of noise impacts was “high”69
  • GRL had failed to assess the social impacts of the Project on Aboriginal people70
  • the potential impacts on health, wellbeing and amenity warranted “extreme” social risk ratings71
  • “most of the articulated fears and aspirations of people who oppose the Project are reasonable and have justification in the evidence”72
  • the Project would result in distributive inequity, as the benefits of the Project would accrue to the current generation but the disbenefits of the Project would burden current and future generations73
  • the negative social impacts would not be mitigated or managed74

Importantly, Preston CJ found that although the noise and dust impacts would comply with relevant non-discretionary development standards in the Mining SEPP, this did not preclude consideration of the social impacts of noise and dust.75

Conclusion

The decision in GRL v Minister76  comes at a time of heightened public awareness of the dangers of climate change, the urgent need to stay within the carbon budget and recognition that collective action at all levels of decision-making is needed.

Consent for GRL’s new coal mine in Gloucester was refused in this case as a result of an orthodox application of existing environmental and planning laws to the latest expert evidence on climate change, coal demand, planning, amenity, visual, social and economic issues. Preston CJ’s analysis of the latest evidence led to rejection of so-called defences to fossil fuel development impacts on climate change, and instead applied the carbon budget approach to assessment of the cumulative climate impacts of GRL’s proposal, at this critical point in time.

GRL v Minister is a decision for the right place — at the right time.

Thank you to Australian Environment Review for permission to republish this article.

Footnotes

1    J Watts “Greta Thunberg, schoolgirl climate change warrior: ‘Some people can let things go. I can’t’” The Guardian 11 March 2019 www.theguardian.com/world/2019/mar/11/greta-thunberg-schoolgirl-climate-change-warrior-some-people-can-let-things-go-i-cant .

2    D Carrington “School climate strikes: 1.4 million people took part, say campaigners” The Guardian 19 March 2019 www.theguardian.com/environment/2019/mar/19/school-climate-strikes-more-than-1-million-took-part-say-campaigners-greta-thunberg .

3    Gloucester Resources Ltd v Minister for Planning [2019] NSWLEC 7; BC201900563 (GRL v Minister).

4    Paris Agreement, opened for signature 22 April 2016, [2016] ATS 24 (entered into force for Australia 10 December 2016).

5    IPCC Global Warming of 1.5°C, an IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty (October 2018) www.ipcc.ch/sr15/ .

6    See above n 5, “Summary for Policymakers”, p 20 para D.1: Estimates of the global emissions outcome of current nationally stated mitigation ambitions as submitted under the Paris Agreement would lead to global greenhouse gas emissions in 2030 of 52–58 GtCO2eq yr−1 (medium confidence). Pathways reflecting these ambitions would not limit global warming to 1.5°C, even if supplemented by very challenging increases in the scale and ambition of emissions reductions after 2030 (high confidence).

7    See above n 5, “Chapter 2 — Mitigation pathways compatible with 1.5°C in the context of sustainable development”, pp 132–4 Tables 2.6 and 2.7.

8    United Nations Secretary-General António Guterres “Secretary-General’s remarks on Climate Change” (Speech, United Nations General Assembly, 10 September 2018) www.un.org/sg/en/content/sg/statement/2018-09-10/secretary-generals-remarks-climate-change-delivered .

9    IPCC “Summary for Policymakers of IPCC Special Report on Global Warming of 1.5°C approved by governments” media release 2018/24/PR (8 October 2018) www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/ .

10   Above n 3.

11   This article is based on M Floro and J Brown “Wrong place, wrong time: The next logical step in environmental, planning and climate change jurisprudence” (AUSPUBLAW, 27 March 2019) https://auspublaw.org/2019/03/wrong-place-wrong-time/ .

12   Above n 3, at [699].

13   Above n 3, at [515].

14   Gloucester Resources Ltd v Minister for Planning and Environment (No 2) [2018] NSWLEC 1200; BC201803014.

15   GG Inc “Opening Written Submissions”, Submission in Gloucester Resources Ltd v Minister for Planning 2017/383563 at para 42.

16   Professor Will Steffen “Expert Report”, Expert Report in Gloucester Resources Ltd v Minister for Planning 2017/383563 at para 3.

17   Above n 16.

18   Above n 3, at [456].

19   Above n 3, at [443].

20   Above n 3, at [445]–[450].

21   Transcript of Proceedings, Gloucester Resources Ltd v Minister for Planning, p 17.

22   Tim Buckley “Expert Report”, Expert Report in Gloucester Resources Ltd v Minister for Planning 2017/383563 at para 13.

23   Above n 22, at para 14.

24   Above n 3, at [526].

25   Above n 3, at [529]–[530]. Similar arguments about “net emissions” have been used in other cases, eg: Australian Conservation Foundation Inc v Minister for Environment (2016) 251 FCR 308; 156 ALD 1; [2016] FCA 1042; BC201607314.

26   Above n 3, at [530].

27   Above n 3, at [532].

28   Above n 3, at [533], referring to BP Australia Ltd v Campbelltown City Council (1994) 83 LGERA 274 at 279 per Mahoney JA.

29   Similar arguments have been used in other jurisdictions, particularly Queensland (eg, Xstrata Coal Queensland Pty Ltd v Friends of the Earth — Brisbane Co-Op Ltd (2012) 33 QLCR 79; [2012] QLC 13). Cf WildEarth Guardians v US Bureau of Land Management 870 F 3d 1222 (10th Cir, 2017).

30   Above n 3, at [534].

31   Above n 3, at [538]–[540].

32   Above n 3, at [541].

33   Above n 3, at [545], referring to K Bennett “Australian climate change litigation: Assessing the impact of carbon emissions” (2016) 33(6) EPLJ 538 at 546–8; and J Bell-James and S Ryan “Climate change litigation in Queensland: A case study in incrementalism” (2016) 33(6) EPLJ 515 at 535.

34   Urgenda Foundation v The Netherlands (Hague District Court, C/09/456689/HA ZA 13-1396, 24 June 2015).

35   Above n 3, at [536].

36   Above n 3, at [549].

37   Above n 3, at [490].

38   Above n 3, at [491]–[492].

39   Cases cited by Preston CJ include Australian Conservation Foundation v Latrobe City Council (2004) 18 VPR 157; 140 LGERA 100; [2004] VCAT 2029; Gray v Minister for Planning (2006) 152 LGERA 258; [2006] NSWLEC 720; BC200609683; Coast and Country Association of Queensland Inc v Smith [2016] QCA 242; BC201608258; Wollar Progress Association Inc v Wilpinjong Coal Pty Ltd [2018] NSWLEC 92; BC201805282; Mid States Coalition for Progress v Surface Transportation Board 345 F 3d 520 (8th Cir, 2003); Montana Environmental Information Center v US Office of Surface Mining 274 F Supp 3d 1074 (D Mont, 2017); Sierra Club v Federal Energy Regulatory Commission 867 F 3d 1357 (DC Cir, 2017); and San Juan Citizens Alliance v United States Bureau of Land Management 326 F Supp 3d 1227 (DNM, 2018).

40   Above n 3, at [515].

41   Cases cited by Preston CJ include Australian Conservation Foundation v Latrobe City Council, above n 39; Gray v Minister for Planning, above n 39; Massachusetts v Environmental Protection Agency 549 US 497 (2007); Urgenda Foundation v The Netherlands, above n 34; Urgenda Foundation v The Netherlands (Ministry of Infrastructure and the Environment) (Hague Court of Appeal, 200.178.245/01, 9 October 2018).

42   Above n 3, at [515].

43   Above n 3, at [525].

44   Above n 3, at [526].

45   Above n 3, at [554].

46   Above n 3, at [555].

47   Above n 3, at [556].

48   Above n 3, at [556].

49   Above n 3, at [563].

50   Above n 3, at [63].

51   Above n 3, at [64].

52   Above n 3, at [70].

53   Above n 3, at [82], [86].

54   Above n 3, at [123].

55   Above n 3, at [123].

56   Above n 3, at [217].

57   Above n 3, at [129].

58   Above n 3, at [195].

59   Above n 3, at [181].

60   Above n 3, at [270]. See Department of Planning and Environment Social impact assessment guideline For State significant mining, petroleum production and extractive industry development (September 2017) www.planning.nsw.gov.au/-/media/Files/DPE/Guidelines/social-impact-assessment-guideline-2017-09.pdf . GRL v Minister is the first court case to consider the 2017 Guideline.

61   See Telstra Corp Ltd v Hornsby Shire Council (2006) 67 NSWLR 256; 146 LGERA 10; [2006] NSWLEC 133; BC200601529; and Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure (2013) 194 LGERA 347; [2013] NSWLEC 48; BC201301826.

62   Above n 3, at [281].

63   Above n 3, at [289].

64   Above n 3, at [310].

65   Defined as the “affective bond between people and place or setting”: above n 3, at [313].

66   Defined as “the relationship between the biophysical and built environment and human mental and physical health”: above n 3, at [315].

67   Above n 3, at [322].

68   Defined as the “feeling of desolation and melancholia derived from chronic changes to loved home environments”: Dr H Askland “Expert Report”, Expert Report in Gloucester Resources Ltd v Minister for Planning, 2017/383563 at para 106. See also Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure, above n 61.

69   Above n 3, at [338].

70   Above n 3, at [342].

71   Above n 3, at [368].

72   Above n 3, at [395].

73   Above n 3, at [416].

74   Above n 3, at [420].

75   Above n 3, at [262]–[263], [269].

76   On 5 March 2019, GRL filed a notice of intention to appeal the decision to the New South Wales Court of Appeal. GRL has until 8 May 2019 to file a notice of appeal.