Tuesday, June 20, 2006

Climate change litigation in Australia

Last post I presented the factual scenario underlying a Federal Court decision that was handed down last week. To recap, the federal government is empowered by the Environment Protection and Biodiversity Conservation Act to consider the environmental effect of proposed developments. Specifically, it is required to consider whether a proposed development is likely to have a significant impact on a matter of national environmental significance (which includes world heritage areas among others – see my EPBC Act primer).

Two coal mines were proposed in Northern Queensland, near a World Heritage area containing rainforests and coral reefs. The coal mined from these new mines is mostly intended to be exported and its burning will create annual greenhouse emissions equivalent to one-quarter of Australia’s current annual emissions. Emissions lead to climate change which are predicted to have a devastating impact on tropical rainforests and coral reefs in Australia.

Blake Dawson Waldron has a good summary of what is not a terribly well-written judgment. The applicant in the case argued:

  • the Minister’s delegate had not properly considered the ‘downstream’ indirect impacts, ie, damage from climate change from emissions from burning the coal;
  • the delegate had not applied the precautionary principle; and
  • the delegate had not properly assessed the ‘cumulative impacts’ of coal mining.

As far as I can tell from the judgment, the judge decided that:

  • the delegate had considered downstream impacts and he probably didn’t have to anyway;
  • the precautionary principle isn’t relevant to this decision;
  • the delegate was not required to look at the cumulative impacts.

Today I’d like to make a few comments and observations about the role of environmental impact assessment (EIA). Tomorrow I’ll look a the economic efficiency of EIA, the use of the precautionary principle and how to look at cumulative impacts.

Environmental impact assessment

As an environmental lawyer, one of the reasons I’m so interested in economic instruments for environmental policy is that environmental law (and traditional environmental impact assessment) does a pretty lousy job at resolving environmental conflicts in many cases. Often it’s just not the right tool.

The reason is that most resource and environmental conflicts involve many players - many sources of a problem, many people affected by those sources: many potential winners and losers. Environmental impact assessment tends to work well when there's one big project that has one or two big impacts that are well defined and understood.

Should governments assess the environmental impacts of projects before approving them? Well, sometimes. Should it assess the greenhouse implications of proposed developments? I’m less sure.

Consider the analytical process of assessing the environmental impact of greenhouse emissions from the burning of coal produced at a proposed coal mine. It’s extremely difficult. What additional emissions will be produced because of this mine? It’s hard to say. If the coal is to be exported, presumably it is to satisfy existing demand. It’s quite likely that the coal burnt would simply have been sourced from some other supplier. If the proposed mine is very large, it’s possible that the additional supply could reduce the world market price of coal, encouraging more to be burnt. But the world market for coal is enormous.

What impact will those additional emissions have on global climate change? What impact will any such increased climate change have on Australia?

Look, it’s not hard to draw conclusions that burning coal produces disproportionately large greenhouse emissions that aggravate climate change causing harm to environments in Australia and around the world, and that burning coal should therefore be discouraged. But the role project-by-project environmental impact assessment is to examine the environmental impact of a particular project. It’s relatively easy to examine impacts on a local environment from a new coal mine, but it’s extremely difficult to examine impacts (locally or globally) from downstream greenhouse gas emissions.

Does that mean we should ignore greenhouse emissions when assessing large projects of this nature? No. But I think we should do it modestly. And it may be that coal mines are not a good target. If it was coal-fired power station, it would be a little different. We could compare its emissions to alternative projects: If we refuse consent to a new coal-fired power station would a lower-emission gas-fired station be built instead? That’s a relevant consideration. We could examine the technology it uses and its likely emissions compared with other new plants being built. We could place conditions on it that require cost-effective measures to be undertaken to reduce its emissions or perhaps even offset them.

It may be that the government can and should consider some of these measures with a coal mine. But it’s more difficult to say 'what is the impact of this project?'.

The difficulty with using project approval to carry out this function is it’s just not very efficient. Hundreds of developments are referred to the federal government each month. Should proponents detail greenhouse emissions for each project and suggest measures to minimise them? Well it’s certainly arguable that they should.

But much more efficient is simply to price greenhouse emissions appropriately, via a carbon tax or emissions trading scheme. Give developers and incentive to reduce emissions themselves. Let them come up with ways to reduce emissions, rather than the government imposing them as conditions.

Of course, this argument is a little trite. It’s all very well to advocate pricing mechanisms, but we don’t have them yet. Isn’t environmental assessment of emissions better than nothing, which is our current alternative? Well yes, I’ll certainly admit that – and that’s why environmentalists are bringing cases like this one. But it’s far from perfect.

What do you think?


Anonymous said...

Just wanted to say "I agree" - the points you raise pretty much outline my thinking on the matter, just way more eloquently :)

David Jeffery said...

Thanks Grant.

Anonymous said...

Great to find your blog, the issue of GHG assessment is obviously very timely and very tricky and needs all the teasing it can get. I think that SOME kind of climate change impact assessment needs to be made before a new coal mine is approved. I live in newcastle, the world's largest coal exporting port, and i like to think that this issue is getting big here. I have just lodged a court case aginst the approval of a large open cut coal mine because the EA prepared for the project did not include an assessment of the impacts generated by the combustion of the coal.

I dont think that the argument that the coal would be sourced from elsewhere is a valid one. If, say, 50 million t of coal is kept where it is in the ground, then even if all the other coal in the world was burned, that 50 million t wouldn't be. Its a tricky argument, i know, but I could make the comparison with drug supply - you cant justify selling heroin by saying that it is just supplying a demand or that someone else is going to sell it anyway, can you?

As for flow on effects into other industries, I think that just a commonsense principle should apply. The idea of a steel mill counting the emissions for the cars where the steel ends up is obviously an extensio ad absurdum. Coal mines are much more obvious targets.

A coal fired power station - sure. A contemporary example of something that i think should have been assessed on climate imapcts was a new coal loader in the port of newcastle. The construction of the loader would mean they needed to mine more coal to make the loader economically effective. if you have to mine more coal then you are going to sell more coal, and would be responsible, as a an acessory before the fact, for its combustion.

I hope im not sounding like a lunatic, Ive obviously got an axe to grind, and I apologise for the scattered thoughts. I was just excited to find your blog. perhaps an email conversation would be better (im not used to posting on blogs and am not crash hot with IT in general)

again, great to read your thoughts.