To borrow an expression, climate change litigation is en marche. The cumulative number of climate change-related cases has more than doubled since 2015, bringing the total number of cases worldwide to over 2,000.¹ Australia has the second-highest volume of cases, topped only by the notoriously litigious United States.² Climate change issues are now playing out in almost every category of legal dispute: public law (administrative law and constitutional law), international law, torts, consumer law, and company law.

This paper is based on a legal briefing produced by the Australian Government Solicitor in 2022 entitled ‘Recent trends in climate change litigation’. First, we outline key recent trends in climate change litigation, with a particular focus on challenges involving government. We then consider recent legislative developments which will colour future litigation in the space.

Overview

In Australia, climate change issues have traditionally arisen out of administrative decision-making under Commonwealth/ state environmental and planning legislation. A judicial review applicant might argue, for instance, that a decision-maker has failed to take climate change into account in their decision. This ‘first wave’ or ‘first generation’ of climate change litigation³ is and remains hotly pursued in Australia.

But legal boundaries are being pushed; litigants are now prosecuting novel duties of care pinned to climate change risks and impacts and claims relying on international agreements and human rights instruments. Further, they are bringing shareholder litigation against major public corporations and institutional investors.

Climate change ‘considerations’ in administrative decision-making

Environmental and planning legislation aside, it is no surprise that different statutory frameworks are giving rise to novel climate change litigation. The Chief Judge of the NSW Land and Environment Court has suggested that:

‘as attitudes to climate change continue to shift, assisted by the recognition of the importance of mitigating climate change in the Paris Agreement, existing legislative frameworks are more likely to be interpreted by the courts as requiring a decision-maker to take climate change into account.’⁴

One such framework where litigants have argued that climate change was required to be taken into account is in the expenditure of public funds. In Environment Centre Northern Territory v Minister for Resources and Water (No 2),⁵ a case which raised ‘significant issues’ under the Legal Services Directions 2017, an environmental group sought judicial review of decisions of the then Minister for Resources and Water providing for grants to an oil and gas company for exploratory drilling in the Northern Territory’s Beetaloo sub-basin. The applicant claimed that the Minister had failed to make reasonable inquiries in respect of climate change-related risks, and accordingly failed to comply with s 71 of the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act). The applicant also claimed that the Minister’s decisions were legally unreasonable, illogical and/or irrational because he did not have regard, or adequate regard to, climate change-related risks.

Relevantly, the court rejected the applicant’s climate change-related grounds.⁶ Section 71(1) of the PGPA provides that the Minister must not approve a proposed public expenditure unless they are ‘satisfied, after making reasonable inquiries, that the expenditure would be a proper use of relevant money’. This ‘satisfaction’, the court said, involved the Minister’s subjective assessment as to whether and what inquiries were reasonable.⁷ In the circumstances of the impugned decisions, the Minister was not required to make reasonable inquiries into the climate change risks put by the applicant.⁸ The matter generated significant media, political, and legal interest.

Another example of a ‘relevant considerations’ case is Environment Victoria Inc v AGL Loy Yang Pty Ltd and Others (Supreme Court of Victoria),⁹ a case in which the plaintiff environmental organisation sought declaratory relief, among other things, that decisions taken by the Victorian Environment Protection Authority (EPA) under the Environment Protection Act 1970 (Vic) did not give proper, genuine and realistic consideration to sub-s 17(2), (3) and (4) of the Climate Change Act (2017) (Vic). The court dismissed the claim, finding that the EPA’s reasons for their decision did not justify the inference that mandatory considerations were not given genuine consideration, or failed to consider certain issues.¹⁰

Challenging emissions reduction targets and policy settings

While fossil fuel project litigation proceeds apace, governments’ climate change policy responses have bred a new litigation challenge for ‘framework cases’;¹¹ in particular, emissions reductions targets and implementation legislation.

In the UK case R (Friends of the Earth) v Secretary of State for Business Energy and Industrial Strategy,¹² the claimants sought judicial review of government policies, including the government’s Net Zero Strategy (NZS). Section 13 of the Climate Change Act 2008 (UK) (CCA) requires the Secretary of State to ‘prepare such proposals and policies’ as the Secretary considers will enable the carbon budgets adopted under the CCA to be met, while s 14 enshrines a reporting/accountability mechanism to Parliament. The NZS was prepared pursuant to these provisions.

The court found that the NZS had been unlawfully adopted, however, because:

• the Secretary had insufficient information about the effect of individual policies and detail about how the policies enabled the carbon budget to be met, which meant a failure to take into account material considerations;¹³ and

• the NZS lacked key information, including an explanation as to how the policies were intended to meet the statutory targets, in breach of s 14 of the UK CCA.¹⁴

In Australia, litigation has tended to focus on project approval challenges, rather than challenges to broader policy and reduction target settings (with the notable exception of the current Torres Strait class action Pabai Pabai v Commonwealth VID622/2021, discussed further below), arguably more reflective though of opportunity, rather than appetite.

NSW has provided us with an uncommon (but indicative) exception. The Protection of the Environment Administration Act 1991 (NSW) (POEA Act) requires the NSW Environment Protection Authority (EPA) to develop environmental quality objectives, guidelines and policies ‘to ensure environment protection’. In Bushfire Survivors for Climate Action v Environment Protection Authority,¹⁵ the Land and Environment Court of NSW made an order in the nature of mandamus compelling the EPA to perform that duty, having found that the EPA’s existing instruments did not comply with the statutory duty, which included a duty to develop instruments to ensure the environment’s protection from climate change specifically.

Novel duties of care

Duty of care cases tied to climate change risks and impacts have attracted significant public interest. There were a large number of unsuccessful tortious claims brought against major energy companies in nuisance or negligence in the USA from 2005 to 2015.¹⁶ Many groups continue to bring similar actions against private companies and against governments, including in Australia, with mixed results.

In Minister for Environment v Sharma,¹⁷ the Full Court of the Federal Court unanimously found that the Environment Minister did not owe a duty of care to Australian children when deciding to approve or not approve a proposed coal mine extension under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act); this was only after the primary judge had recognised such a (novel) duty. The Full Court (Allsop CJ, Beach and Wheelahan JJ) delivered separate judgments and their reasoning differed in some significant respects. One notable area of divergence was the court’s approach to dealing with complex policy questions.

Chief Justice Allsop and Wheelahan J accepted that the posited duty would, at the breach stage, beg policy questions that are unsuitable for judicial determination. The Chief Justice quoted the New Zealand Court of Appeal’s comments in Smith v Fonterra18 with approval: ‘Courts are… ill-equipped to address the issues that the claim raises’, which call for ‘a level of institutional expertise, democratic participation and democratic accountability that cannot be achieved through a court process’.¹⁹ Justice Beach, however, was not so restrained; invoking Gaudron, McHugh and Gummow JJ in Brodie v Singleton Shire Council²⁰ that policy was ‘no answer’ to denying a novel duty of care.

While the applicants in Sharma were ultimately unsuccessful, duty of care cases continue to be brought. On 26 October 2021, a representative proceeding was brought against the Commonwealth by applicants who are indigenous to the Torres Strait Islands. The applicants in Pabai Pabai v Commonwealth allege that the Commonwealth owes a duty of care to Torres Strait Islanders to take reasonable steps to protect Torres Strait Islanders, their traditional way of life, and the marine environment, including the Islands, from the current and projected impacts of climate change.²² Pabai is ongoing and documents filed in the proceeding are publicly available on the Federal Court’s website.

Climate change legislation update

On 14 September 2022, the Climate Change Act 2022 (Cth) (CCA) and the Climate Change (Consequential Amendments) Act 2022 (Cth) commenced. The CCA provides, among other things, for Australia’s emissions reduction targets; in particular, by reducing:

• Australia’s net GHG emissions to 43% below 2005 levels by 2030, implemented as both a point target and an emissions budget covering the period 2021–2030 (calculated using a straight-line trajectory taking a linear decrease from 2020 to 2030); and

• Australia’s net GHG emissions to zero by 2050.²³

These targets ‘set a floor on Australia’s emissions reduction ambition, not a ceiling’.²⁴ It remains to be seen whether and how these targets might arise in any future litigation.

The Consequential Amendments Act provides that the targets will be incorporated into a range of Commonwealth legislation to provide particular guidance to that legislation and relevant statutory bodies, such as the Clean Energy Finance Corporation, Australian Renewable Energy Agency and Infrastructure Australia. Importantly, ‘[i]t is not intended that this clause would impact other statutory frameworks that have not been so amended’.²⁵

Finally, the Safeguard Mechanism (Crediting) Amendment Act 2022 (Cth), which passed both Houses of Parliament on 30 March 2023, should be mentioned. The Crediting Amendment Act contains several key reforms. One of which is requiring new emissions caps and budgets for facilities covered by the Safeguard Mechanism (i.e., the baseline limits for Australia’s largest industrial emitters) to reduce their emissions intensity by 4.9% per year. Importantly, section 22XF of the National Greenhouse and Energy Reporting Act 2007 (Cth) now contains a new maximum civil penalty for an excess emissions situation and a new due date for resolving an excess emissions situation.²⁶ An excess emissions situation exists when a facility’s net emissions are above its baseline^.27

Conclusions

The key takeaway is that climate change litigation is not just here to stay for the foreseeable future; it is evolving quickly, and legal practitioners should take note. BN

^ENDNOTES

^{1 Joana Setzer and Catherine Higham, Global Trends in Climate Change Litigation: 2022 Snapshot (Policy Report, Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, June 2022) 1.}

^{2 Ibid 9.}

^{3 See for example, Brian Preston, ‘Influence of the Paris Agreement on Climate Change Litigation: Legal Obligations and Norms (Part I)’ (2021) 33(1) Journal of Environmental Law 1, 27; Jacqueline Peel et al, ‘Shaping the Next Generation of Climate Change Litigation in Australia’ (2017) 41 Melbourne University Law Review 793, 796.}

^{4 Preston, above n 3, 28.}

^{5 [2021] FCA 1635.}

^{6 But upheld a challenge to one of the impugned decisions on other grounds: [189]-[217].}

^{7 [57]-[80].}

^{8 [80].}

^{9 [2022] VSC 814.}

^{10 Ibid [97].}

^{11 Setzer and Higham, above n 1, 22.}

^{12 [2022] EWHC 1841 (Admin)}

^{13 Ibid [211], [216]-[217].}

^{14 Ibid [235], [253]-[254].}

^{15 [2021] NSWLEC 92.}

^{16 Geetanjali Ganguly, Joana Setzer and Veerle Heyvart, ‘If at First You Don’t Succeed: Suing Corporations for Climate Change’ (2018) 38(4) Oxford Journal of Legal Studies 841, 846.}

^{17 [2022] FCAFC 35; (2022) 291 FCR 311 (Sharma).}

^{18 [2021] NZCA 552.}

^{19 [2022] FCAFC 35, [255].}

^{20 [2001] HCA 29; (2001) 206 CLR 512.}

^{21 Sharma, above n 17 [630] – [633].}

^{22 Federal Court of Australia, proceedings VID622/2021.}

^{23 CCA, s 10(1)(a).}

^{24 Revised Explanatory Memorandum, page 2.}

^{25 Revised Explanatory Memorandum, page 10, [24].}

^{26 Crediting Amendment Act, items 24-26, 40 of Schedule 1.}

^{27 National Greenhouse and Energy Reporting Act 2007 (Cth) s 22XE.}

^{The authors are grateful to Roshni Kaila, Law Graduate at the Australian Government Solicitor for her research assistance.}