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New Zealand Journal of Environmental Law |
Last Updated: 21 January 2023
111
Climate Change Considerations in Energy Decision-making: A Comparative Analysis
Annie Cao*
Climate change is described as the greatest threat facing humanity. This article canvasses the different approaches to renewable and non-renewable energy applications in New Zealand, California and Denmark. In New Zealand, the Supreme Court has ruled that the effect of greenhouse gases on climate change cannot be considered for discharge permit applications under the Resource Management Act 1991 (RMA). Likewise, global climate change is irrelevant in considering consent applications for ancillary activities of a coal mine. A comparative analysis reveals the shortfalls in New Zealand’s approach that takes power away from local authorities in preference for (an ineffective) national scheme to control greenhouse gases. This article argues that New Zealand is not doing its “fair share”. Instead, the country should strive for stronger emissions reduction targets that are supported by consistent policies across the energy sector and renewable-friendly planning laws. Until a global agreement is reached, climate change should be a relevant consideration for all energy applications, especially as New Zealand coal is planned for export to countries where climate change is unregulated. The promulgation of a new National Environmental Standard can provide guidance to local authorities on the role of climate change considerations under the RMA.
*The author graduated with a BSc/LLB (Hons) in 2014 from The University of Auckland. This article is based upon a dissertation submitted for the degree of Bachelor of Laws (Honours). Email contact: annie.elizabeth.cao@gmail.com.
1. INTRODUCTION
The message of the fifth Intergovernmental Panel on Climate Change (IPCC) report is clear and forceful: “warming in the climate system is unequivocal”.1 A substantial reduction in greenhouse gas emissions (GHGs) is required to avoid “dangerous” climate change.2 It is now “extremely likely” that human influence is the dominant cause of warming since the mid20th century. But despite 97 per cent of climate scientists supporting the tenets of anthropogenic climate change,3 this degree of certainty is not reflected in policy- and decision-making around the world.
With nearuniversal membership of the United Nations Framework Convention on Climate Change (UNFCCC), all parties agreed to prevent “dangerous anthropogenic interference with the climate system”.4 Renewable energy development has since become an integral method of reducing national GHGs. At the same time, investment in renewable energy addresses issues of energy supply and security, and supports the local economy.
The main purpose of this article is to highlight the confused state of New Zealand laws in this area. The Supreme Court in Greenpeace New Zealand Inc v Genesis Power Ltd (Greenpeace)5 ruled that climate change is only a relevant consideration for renewable energy projects and not for discharge applications related to coal-fired power plants. This was confirmed in West Coast ENT Inc v Buller Coal Ltd (Buller Coal ).6 The latter case decided a subtly different issue, that the overseas combustion emissions of coal are not actual or potential effects of the coalmining activity.
The New Zealand approach is assessed in relation to two other jurisdictions that have made considerable advances in renewable energy development in recent years, California and Denmark. This article asks, first, whether climate change is a valid consideration for all energy generation projects in the three jurisdictions and, secondly, what New Zealand law should be in light of a comparative analysis of the three approaches.
2. NEW ZEALAND
2.1 Introduction
New Zealand has a small population of 4.47 million for a landmass area of 268,680 km2.7 At 33 per cent of the total primary energy supply (TPES),8 oil is New Zealand’s primary source of energy.9 Renewable energy accounts for 37 per cent of TPES,10 and in terms of electricity production, 73 per cent comes from renewable sources.11 Hydroelectricity makes up around half of all electricity generated.12
2.2 Statutory Background
The RMA has undergone numerous reforms and amendments since its enactment in 1991.13 Most pertinent to this article is the Resource Management (Energy and Climate Change) Amendment Act 2004 (RMAA 2004).
The New Zealand government signed the UNFCCC in 1992 and ratified the Kyoto Protocol (KP) in 2002 through the enactment of the Climate Change Response Act 2002 (CCRA).14 The RMAA 2004 formed part of the government’s climate change policy package. It was introduced to Parliament upon ministerial recommendation that resource management decisions and local government plans did not adequately consider the effects of climate change.15
As a result, definitions of “climate change”, “greenhouse gas” and “renew- able energy” were inserted into the RMA. New s 7 matters that decisionmakers must “have particular regard to” were added: s 7(ba) “the efficiency of the end
(Wellington, 2013) at 3. Statistics are based on 2012 data.
12 At 63.
use of energy”; s 7(i) “the effects of climate change”; and s 7( j) “the benefits to be derived from the use and development of renewable energy”. New ss 70A, 70B, 104E and 104F were also added.The RMAA 2004 has been criticised for containing mixed messages.16 This is evident in the purpose section:
3 The purpose of this Act is to amend the principal Act—
(a) to make explicit provision for all persons exercising functions and powers under the principal Act to have particular regard to—(i) the efficiency of the end use of energy; and(ii) the effects of climate change; and
(iii) the benefits to be derived from the use and development of renewable energy; and
(b) to require local authorities—
(i) to plan for the effects of climate change; but(ii) not to consider the effects on climate change of discharges into air of greenhouse gases.
On the one hand, local authorities are given a strong mandate to plan for the effects of climate change.17 But on the other hand, s 3(b)(ii) suggests that Parliament was concerned that decision-makers might be excessively influenced by climate change considerations. Commentators are not surprised that this “flagrant incongruence” has resulted in litigation.18
In particular, the legal community has had considerable difficulties interpreting s 104E. This section provides:
104E Applications relating to discharge of greenhouse gases
When considering an application for a discharge permit or coastal permit to do something that would otherwise contravene section 15 or section 15B relating to the discharge into air of greenhouse gases, a consent authority must not have regard to the effects of such a discharge on climate change, except to the extent that the use and development of renewable energy enables a reduction in the discharge into air of greenhouse gases, either—
(a) in absolute terms; or(b) relative to the use and development of nonrenewable energy.
The Supreme Court in Greenpeace and Buller Coal attempted to shed light on the correct interpretation of this section. The courts have referred to the first half of the section as the “prohibition” and the second part as the “exception”. Both decisions are discussed in detail below.
The National Policy Statement on Renewable Electricity Generation 2011 (RE NPS) sets a renewable electricity target of 90 per cent by 2025.19 This goal is subject to the condition that security of supply is not affected.20 The document compels decision-makers to recognise and provide for the national significance of renewable activities by including renewable energy objectives, policies and methods into regional and district plans.21 Both the New Zealand Energy Strategy 2011–2021 and the New Zealand Energy Efficiency and Conservation Strategy 2011–2016 endorse the 90 per cent target.22
2.3 Case Law
(i) Climate change considerations
In a series of wind energy cases, the Environment Court showed that climate change was a highly relevant consideration. The following examples are indicative of the Court’s approach to all renewable energy projects.
Sections 7(i) and ( j) of the RMA have prompted the courts to consider IPCC reports,23 New Zealand’s KP commitments,24 and the reduction of GHG emissions as a matter of priority.25 The equivalent tonnage of CO2 that a
renewable project prevents from entering the atmosphere is another recurring consideration.26A related concern is the need to diversify New Zealand’s energy base and to increase security of supply. In light of future climate unpredictability, the limitation of hydroelectricity in times of drought is addressed.27 These positive factors of renewable energy projects are supported by the RE NPS.
(ii) Balancing climate change against other considerations
In Meridian Energy Ltd v Wellington City Council, the Court recognised two environments. “The first is the locality of and surrounding the site which could be adversely affected ... The second is the more abstract concept of the global, or at least regional, environment which might be positively affected.”28 Therefore, climate change as a global and national concern is balanced against local impacts of wind farm developments such as landscape effects, amenity, noise and Treaty of Waitangi issues.
It is a matter of national significance to protect outstanding natural land- scape from “inappropriate subdivision, use, and development”.29 Consent applications for Project Hayes in Central Otago were declined as the project would create its own “wind farm landscape” in a “highly natural and near endemic environment”.30 But where landscape effects do not outweigh the benefits of renewable energy, consent conditions are often imposed to enhance the landscape through pest control, weed management and indigenous regeneration.31
The relationship of Māori with their ancestral lands, water, sites and other taonga is another matter of national significance that can outweigh the global and national benefits of renewable energy.32 This was the outcome in Outstanding Landscape Protection Society Inc v Hastings District Council, where the local iwi put forward extensive evidence of their attachment to the affected area.33 Where adverse environmental effects cannot be avoided,
33 Outstanding Landscape Protection Society, above n 24, at [81].
remedied or mitigated, decisionmakers can have regard to offsetting measures and environmental compensation.34
(i) Greenpeace litigation
(a) Background
In 2005 Northland Regional Council granted consent to Mighty River Power Ltd to operate a coal-fired power station, known as Marsden B, in Whangarei. Greenpeace appealed against the consents.
Discharge permits grant consentholders the ability to contravene s 15 RMA.35 The issue in dispute is the extent to which consent authorities can take into account the impact of the proposed discharge on climate change in the decisionmaking process.
In the Environment Court,36 Judge Newhook dismissed the appeal. This was overturned by Williams J in the High Court.37 At this stage, Genesis Power Ltd was granted leave to intervene and applied for declarative relief on the meaning of s 104E in relation to a proposed gas-fired power plant in the Rodney district. The Court of Appeal and the Supreme Court decided by majority that the effect of GHGs on climate change is not a valid consideration for discharge applications.
(b) Arguments in favour of Greenpeace
Williams J in the High Court and Elias CJ in her dissent in the Supreme Court decided in favour of Greenpeace. Both stressed the paramount importance of ss 7(i) and 7( j) in its application to all energy applications, whether or not renewable energy is proposed.38
Williams J considered the prohibition in s 104E to be in conflict with the mandatory consideration in s 7(i).39 Elias CJ did not see a conflict as such, but saw the s 7(i) obligation to be limited by s 104E.40 Both reached the same conclusion that if an application does not enable a reduction in the discharge of GHGs, then to the extent that a comparable renewable energy proposal enables a
34 This is expressly provided for in RE NPS, above n 19, at Policy C2. 35 RMA, s 87(e).
reduction of GHG emissions, the effects of climate change can be considered.41 Only to this limited extent is such consideration allowed. An overall assessment of the project’s GHG effects on climate change is not permitted.42Section 7( j) should be considered in an unrestricted fashion for all appli cations.43 Therefore, discharge permits for proposals that involve renewable sources of energy are more likely to be granted under s 104E.44 Elias CJ saw renewable and nonrenewable applications to be “simply the reverse side of the same coin”.45 To disregard the nonrenewable aspect of an energy source would be contrary to the express acknowledgement of the advantages of renewable energy in s 7( j).46
(c) Arguments against Greenpeace
The Court of Appeal disagreed with Williams J in holding that the s 7 consid erations do not apply to projects caught by s 104E. The Court reasoned that the impact of GHGs on climate change does not fall under s 7(i) because it is upstream of climate change itself, rather than an “effect” of climate change.47 This point seems unduly formalistic. Surely, the purpose of considering the effects of climate change is to mitigate climate change itself. The Court also restricted the mandatory consideration under s 7( j). It held that the benefits of renewable energy does not entail that the disbenefits of non-renewable energy must be considered.48 Nonrenewable sources cannot be “evaluated against a general baseline that renewable energy production is better”.49
Both appellate courts preferred an interpretation of the exception that did not overwhelm the prohibition.50 This is a moot point. It seems impossible to consider the effect of GHGs on climate change to a limited extent for non renewable applications and still satisfy the prohibition.
43 At [25].
46 At [11].
(d) Purpose and legislative history of RMAA 2004
The Environment Court, the Court of Appeal and the majority in the Supreme Court relied upon the purpose and legislative history of the RMAA 2004, Hansard and prior cases to support their interpretation of s 104E.Section 104E, as introduced, read:
104E Applications relating to discharge of greenhouse gases
Despite section 7(i), when considering an application for a discharge permit or coastal permit to do something that would otherwise contravene section 15 or section 15B relating to the discharge into air of greenhouse gases, a consent authority
(a) must not have regard to the effects of such a discharge on climate change; but(b) may have regard to the effects on climate change of an activity involving the use and development of renewable energy to the extent that it reduces the discharge of greenhouse gases in New Zealand.
If this was enacted, there would be no ambiguity.51 The section was redrafted by the Select Committee, but upon the second reading the responsible minister told Parliament that the amendments added clarity “without requiring substantive change”.52 The majority in the Supreme Court relied upon this speech in forming the view that the legislative intent between the Bill versions remained unchanged.53
The textual analysis in the Court of Appeal and the Supreme Court was brief. The judgments were driven by the thrust of the RMAA 2004, to nationalise control of GHGs.54 To compare a coal-fired power plant with a renewable energy alternative, to the limited extent endorsed by Elias CJ, would be contrary to the plain reading of s 3(b)(ii) of the RMAA 2004.
Section 9 of the RMAA 2004, in revoking existing regional rules that control GHG discharges “solely for its effects on climate change”, supports this legislative thrust. GHG emissions are seen to be unsuitable for regional control as the climate change effects of such discharges are global, not regional, in character. The Court of Appeal recognised the danger of selective behaviour if regions adopted different standards.55 There would be a duplication of effort
between national and regional government to regulating GHGs56 which would lead to the “double regulation” of the emissions.
(e) Prior Environment Court decisions
Environmental Defence Society v Auckland Regional Council and Environ- mental Defence Society v Taranaki Regional Council were quoted to support the majority Supreme Court interpretation.57 In both preRMAA 2004 cases, the Environment Court declined to impose a carbon sink condition on discharge consents for gas-fired power stations. The Environment Court rightly predicted future government policy, that GHG emissions should be controlled on a consistent national level given the complexity and uncertainties of climate change.58
(ii) Buller Coal litigation
(a) Background
Despite the outcome in Greenpeace, the role of the RMA in addressing the effect of indirect emissions on climate change was unclear.59 The Supreme Court in Buller Coal has recently declared that the correct interpretation of the RMAA 2004 means that GHG effects on climate change are also invalid in this context.
Buller Coal Ltd and Solid Energy Ltd applied, and were granted resource consents, to mine coal by West Coast Regional Council and Buller District Council. Coal mining is a restricted discretionary activity under the Buller district plan. This means that the Council’s discretion is limited to consideration of certain matters specified in the plan.60 The consequence of the end use of coal on climate change is not one of these matters. Therefore, this consideration is irrelevant to the decisionmaking process.61 Other “ancillary” activities, which do not have restricted discretionary statuses, require resource consents to use land,62 water,63 to disturb waterways,64 and to discharge contaminants into the
56 At [40].
60 RMA, s 77B(3), (4).
environment.65 Such activities include roading, pipe works, processing plants, coal handling and the transportation of hazardous substances.66
(b) Arguments
West Coast ENT Inc and Forest and Bird appealed against the Council decisions. All parties sought a declaration on whether the RMAA 2004 removed the jurisdiction of decisionmakers to consider GHG effects on climate change for the ancillary activities under s 104(1)(a). Does the end use of coal fall under the definition of “effect”?
In the Environment Court, Judge Newhook was persuaded by the majority judgment in Greenpeace, and held that ss 7(i) and 104(1)(a) cannot be interpreted to “cut down the clear underlying policy of the 2004 Amendment” in order to allow indirect climate change effects to be considered.67
Whata J’s judgment in the High Court, while considerably more detailed, reached the same conclusion. Whilst the alternative interpretation is “intuitively attractive”,68 his Honour found the purpose of the RMAA 2004,69 and the problems of extraterritorial regulation of coal combustion, to be more persuasive arguments.70 In November 2012 the Supreme Court granted leave for a direct appeal to the Supreme Court.71
The Supreme Court decision was highly anticipated. Unsurprisingly, Elias CJ dissented in a similar vein to Greenpeace. Her Honour rejected Whata J’s extraterritorial argument, as “the effects relied on are moreover effects in New Zealand by reason of the phenomenon of global climate change”.72 Also, s 104(1)(a) does not exclude end use considerations as the definition of “effect” includes future and cumulative effects, regardless of scale, on an ecosystem.73 Elias CJ saw the RMAA 2004 as only pertinent to discharge applications, therefore s 104(1)(a) is unaffected by the amendments.74 Lastly, the overall
69 At [40].
70 At [51]–[55].
71 West Coast ENT Inc v Buller Coal Ltd [2012] NZSC 107. 72 Buller Coal SC, above n 6, at [9].
73 At [74], [69]. See RMA, ss 2 and 3. The majority, at [151], agreed that the language of s 104(1)(a) is broad enough to allow evidence of end use climate change effects to be introduced.
74 At [84].
purpose of sustainable management would be undermined if decisionmakers were to “ignore” the link between coal combustion and global climate change.75 The majority judgment agreed with the High Court. Elias CJ’s literal interpretation of s 104(1)(a) was rejected based on the majority’s take on the scheme and purpose of the RMA, as amended in 2004.76 To adopt the literal interpretation would produce “anomalous” outcomes, for example, if climate change considerations were permitted for ancillary activities of a coal-firedpower station, but prohibited under the discharge application.77
It was also argued that the end use effects of coal mined from the West Coast are indirect and intangible. Under indirectness, the effects are too remote because they are direct consequences of combustion, rather than the mining itself.78 For intangibility it was reasoned that any restrictions on New Zealand’s coal output would not make a difference to global coal usage and climate change as the importers would simply obtain coal from elsewhere.79
2.4 Discussion
The RMAA 2004 has divided commentators as well as the courts. Tal saw the Supreme Court Greenpeace decision as logical “in light of fairly clear statutory language”.80 Barton and Fisher, in preGreenpeace articles, did not see any ambiguity in the RMAA 2004.81 In contrast, Steane and Weeks saw “inherent (and unfortunate) ambiguity” in ss 104E and 70A.82
The split of opinions from the Environment Court up to the Supreme Court is a manifestation of contrasting ideological perspectives on climate change effects and mitigation. The Supreme Court Buller Coal decision is seen to be “a win for mining”,83 but also a “retrograde step” in New Zealand climate change law.84 While the mining industry benefits, this outcome will not facilitate the ultimate objective under the UNFCCC, the stabilisation of GHG concentrations in the atmosphere.85
75 At [77].
76 At [168].
77 At [166].
78 At [117].
79 At [122].
The arguments of indirectness and intangibility noted by the majority in Buller Coal are weak. Regarding the former, their position is “impossible to reconcile” with the wide definition of “effect” under the RMA.86 Also, the majority approach creates an unpleasant discrepancy between renewable and nonrenewable applications. Why can the global environment be considered for renewable projects,87 but not for a coal mine? Despite these criticisms, the majority judgment is persuasive. The anomalous outcomes that would arise under Elias CJ’s interpretation, if climate change considerations could be considered for ancillary activities of a coal-fired power plant but not under a discharge application, would not be ideal. Legislative amendment is clearly needed to achieve more satisfactory environmental outcomes.
3. CALIFORNIA
3.1 Introduction
As the most populous state in the United States with a population of 38 million,88 California is no small emitter. It is the world’s fifth-largest consumer of energy,89 and on the global scale, the twelfthlargest emitter of GHGs in the world.90 The bulk of instate electricity generation is powered by natural gas at 61.1 per cent in 2012.91 Renewable sources of electricity have steadily increased, from 13.7 per cent in 2007 to 17.1 per cent in 2012.92
3.2 Statutory Background
Californian environmental law is a combination of federal, state and municipal laws and regulations. Federal environmental laws, such as the Clean Air Act, must be passed by both the House of Representatives and the Senate.93
Environmental Law Handbook (21st ed, Government Institutes, USA, 2011) 1 at 2.1.
Specific to California, the California Environmental Quality Act of 1970 (CEQA) was passed shortly after the federal government passed the National Environmental Policy Act of 1969 (NEPA).94 As California’s broadest environmental law, it imposes environmental impact reporting and public participation obligations on state and local agencies.95 Agencies first conduct an initial study to determine whether a project has the potential to cause a significant effect on the environment.96 If the study concludes in the affirmative, then an environmental impact report (EIR) is prepared to identify and address all significant effects,97 project alternatives and mitigation measures.98 Projects should not be approved if there are feasible alternatives or feasible mitigation measures available “which would substantially lessen the significant environmental effects of such projects”.99The Californian Global Warming Solutions Act of 2006, known as AB 32, is termed “California’s landmark climate change legislation”.100 Viewed as the country’s “most comprehensive” GHG reduction programme,101 a concrete goal was established to cap California’s GHG emissions at 1990 levels by 2020.102 This has since been supplemented by an ambitious target of 80 per cent below 1990 levels by 2050.103 Meeting the first target requires a 29 per cent cut in emissions below projected 2020 levels.104
To help meet the AB 32 goal, an aggressive renewable portfolio standard (RPS) was established. The RPS applies to all electricity retailers and requires 33 per cent of electricity retail sales to come from renewable sources by 2020.105 The target is seen by commentators as the “most ambitious” RPS programme in the country,106 if not most of the developed world.
In addition, Californian Senate Bill 1368 (SB 1368), enacted in 2006, prohibits publicly owned electric utilities from entering into longterm commitments with power plants that exceed the emission performance standard
94 PRC § 21000–21178; NEPA 42 USC § 4321–4370.
95 PRC § 21003.1.
96 PRC § 21080(c), (d); CEQA Guidelines 14 CCR § 15063.
97 PRC § 21100(b)(1).
98 PRC § 21100(b)(3)–(4).
99 PRC § 21002.
There are incremental goals of 20% by the end of 2013 and 25% by 2016.
(Kluwer Law International, Copenhagen, 2008) at 277.
(EPS) of 0.5 metric tonnes CO2 per megawatthour (MTCO2/MWh).107 The EPS applies to new ownership investments in power plants and new or renewed contracts with terms of five years or more, including contracts with power plants located outside of California.108The impact of SB 1368 should not be underestimated. Effectively, high GHG-emitting facilities, such as coal-fired power plants, are prohibited from entering into new contracts with electric utilities. As existing contracts expire, more than 18,000 GW procured under contracts with highemitting facilities will have to be replaced by more efficient sources.109
3.3 Permitting Regime
The California Energy Commission (Commission) is the state’s energy and planning agency, established by the WarrenAlquist Act of 1974.110 The Commission has the exclusive jurisdiction to license thermal power plants of 50 MW or larger.111 For thermal power plants, a certificate is needed to construct or expand a power plant or related facilities. Applicants file an application for certification (AFC).112 The Commission then conducts a number of public conferences and evidentiary hearings.113 A proposed decision is released which is followed by further public participation requirements. The Commission’s regulatory process is equivalent to the preparation of a CEQA EIR.114
Nonthermal power plants, such as wind farms and solar photovoltaic systems, are outside the jurisdiction of the Commission. Instead, such projects are governed by state and local planning laws. Permitting takes place on the county level as it is local government that has jurisdiction to make land use decisions within the county’s limits.115 Many counties have either adopted wind energy zoning ordinances or specific wind energy provisions in general plans. These govern where wind energy projects can be developed, height restrictions, noise, safety and other requirements.116
107 20 CCR § 2902(b).
111 PRC § 25500.
112 PRC § 25519(a).
113 PRC § 25521.
114 PRC § 21080.5.
3.4 Case Law
Regardless of the fuel source, the Commission considers the effect of GHGs on climate change for renewable and nonrenewable power plants. This approach is largely driven by CEQA and AB 32. In coming to its decision, the Commission considers project alternatives, engineering aspects, public health and safety concerns, and environmental and local impact concerns. The effect of GHG emissions is considered under public health and safety.
Two recent certificates issued were for the Oakley Generating Station (Oakley), a natural gas-fired facility with a generating capacity of 624 MW.117 The second was for the Palmdale Hybrid Power Project (Palmdale), a hybrid natural gas fired generating facility integrated with solar thermal generating equipment. It has a generating capacity of 570 MW.118
Under the GHG emissions section of the decisions, the Commission first makes a frank acknowledgement:119
There is general scientific consensus that climate change is occurring and that man-made emissions of GHGs, if not sufficiently curtailed, are likely to contribute further to continued increases in global temperatures.
This is followed by an outline of the relevant laws and regulations. These include AB 32, Executive Order S305, SB 1368 and mandatory reporting obligations. The Commission then adopts a threepart test to assess whether the proposed facility advances the relevant goals and policies.120
Gas-fired plants must:
2011.
With regards to the overall system heat rate, it is important to assess a project’s GHG emissions on a systemwide basis because of the integrated nature of power plants.121 Heat rate is the amount of fuel needed to generate a unit of electricity.122 Both Palmdale and Oakley have significantly lower heat rates than existing power plants in their respective areas, therefore fewer GHG emissions would be emitted per MWh of generation.123The Commission recognised that renewable resources, such as wind and solar, are not ondemand resources.124 Therefore, new efficient gas-fired generators are “vital” in replacing less efficient facilities and to facilitate new renewable generation.125 The Commission qualified its support for efficient nonrenewable resources by stating that,126 “we cannot and should not continue adding gas-fired plants ... ad infinitum” therefore we “expect that the proportion of gas generation in the state’s generation mix will gradually diminish”.127
For both projects, the constructionrelated and operational GHG emissions were deemed not to cause a significant environmental impact. The Commission concluded that by reducing systemwide emissions, both projects were consistent with the state energy policy and would foster the achievement of AB 32 and Executive Order S305 goals.128
The Palen Solar Power Project (Palen) is a solar thermal electric generating facility with a generating capacity of 500 MW. The structure of the decision is the same as the nonrenewable applications above. Under the GHG emissions section, the Commission analysed constructionrelated and operational emissions from, inter alia, boilers, maintenance vehicles and construction trucks.129 These emissions were deemed insignificant, with the project’s EPS at a low 0.015 MTCO2E/MWh.130 The Commission went through a generic
version of the Avenal test,131 and easily concluded that the project will reduce net GHG emissions from the electric system.132Other project impacts were more concerning. For example, a range of conditions were imposed to mitigate against significant impacts on archaeological resources and the visual landscape.133 But, “given the large scale of the impact area, no available mitigation measures were identified that would be sufficient to mitigate the significant visual impacts to levels below significance”.134 In addition, the project would contribute to considerable cumulative visual impacts caused by future solar projects.135
Where a project has significant environmental impacts that cannot be mitigated, the project cannot be approved unless the Commission certifies that:136
[S]pecific overriding economic, legal, social, technological, or other benefits of the project outweigh the significant effects on the environment.
Palen’s benefits included reducing the state’s fossil fuel dependence, “a diminishing energy source”, the improvement of local air quality, public health, economic employment benefits and the diversification of energy supplies.137 In addition, the project would:138
[R]esult in the reduction of greenhouse gases which will help curb or reduce the impact of climate change to California, thereby allowing for the continued existence of the desert specialstatus species.
These considerations were balanced against, and ultimately outweighed, the local adverse effects.139 The project was approved despite the remaining unmitigatable effects.140
131 At VA16.
132 At VA13.
133 At VIC34–VIC58.
136 PRC § 21081(b).
137 Palen, above n 109, at VIII5. 138 At VIII6.
3.5 Federal Regulation of GHG Emissions
There is great disparity between individual states and their response to climate change. Actions plans and policies range from purely aspirational to concrete reduction targets.141 Despite the unlikelihood of “congressional action on climate change issues in the next few years”,142 the tide is turning and non renewable energy projects are now subject to GHG regulation under the Clean Air Act as a result of the federal Environmental Protection Agency (EPA) starting to take GHG regulation into its own hands.
This current position developed as a result of the landmark case State of Massachusetts v Environmental Protection Agency.143 The Supreme Court declared that the EPA has authority to regulate GHG emissions from new motor vehicles under s 202(a)(1) of the Clean Air Act. The Court held that the definition of “air pollutant” was broad enough to encompass GHGs. The only question left to the EPA was whether GHGs would cause or contribute to air pollution that may “endanger public health or welfare”.144 The EPA answered in the affirmative in December 2009,145 and proceeded to fulfil its obligation to regulate GHG emissions from new motor vehicles.146
After this Supreme Court declaration, the EPA extended its GHGregulating authority to all polluting sectors.147 The EPA GHG Reporting Rule created a national registry of GHG emissions for all sectors of the economy.148 In addition, major stationary sources of GHGs are now covered by the Prevention of Significant Deterioration (PSD) and Title V permitting programmes.149 State authorities are under an obligation to alter air quality rules in compliance
Environmental Law Handbook (21st ed, Government Institutes, USA, 2011) 673 at 2.2.5. 149 Title V is an operating permit that is mostly concerned with public participation. See US
with these EPA changes. PSD requires major stationary sources of a regulated pollutant to comply with expensive preconstruction or premodification permitting requirements.150 A PSD permit requires the installation of the best available control technology (BACT),151 an air quality analysis, an additional impacts analysis and public participation.152On top of these regulations, the EPA on 20 September 2013 announced its proposed new source performance standards (NSPS). This is its first step towards the implementation of President Obama’s Climate Action Plan, launched in June 2013.153 The proposed NSPS limits the amount of carbon pollution that new power plants can emit.154 The proposed limit for coal fired plants is 1000 lb CO2/MWh gross over a 12operatingmonth period.155 Although the EPS in California is as stringent as the NSPS, the proposal gives a push to other states to follow California’s lead.156 The most obvious flaw of the proposed NSPS is the exclusion of existing power plants. Such regulation is necessary to fully implement Obama’s Climate Action Plan.157
Federal agencies shall address climate change concerns in NEPA documents even if a federal project has indirect effects on climate change.158 So long as the effects are reasonably foreseeable, failure to consider such effects in
EPA Clean Air Act Permitting for Greenhouse Gases: Guidance and Technical Information Fact Sheet at 6.
NEPA documents can be challenged in court.159 The same approach applies in California under CEQA.160 There are no case studies in California akin to Buller Coal but relevant cases can be found at a federal level.In the precedentsetting decision of Border Power Plant Working Group v Department of Energy,161 the Bureau of Land Management’s decision to grant a right-of-way for power lines associated with new gas-fired power plants in Mexico was challenged. The plaintiff successfully claimed that the BLM failed to consider the effect of GHG emissions in its NEPA documents.162 Prior to this case, no court has held that the impact of GHGs on climate change is sufficiently foreseeable for agencies to consider.163
Border is a significant decision because the emissions were to be released extraterritorially in Mexico. Under this approach, it would mean that the indirect emissions in Buller Coal would be considered. However, Border is the only case of its type cited in the literature and its brief reasoning means its reliability is doubtful.164
In Mid States Coalition for Progress v Surface Transportation Board, it was claimed that the Surface Transportation Board violated NEPA by failing to examine the foreseeable effect of GHGs in deciding to upgrade a rail line to transport coal from Wyoming to power plants in the Midwest. The Court agreed and considered indirect emissions from ancillary activities to be relevant.165
The Council on Environmental Quality has issued guidance on the content of NEPA documents when federal agencies consider the direct and indirect GHG emissions of their actions.166 In its draft guidance memorandum, it proposed that where an activity is anticipated to “cause direct emissions” of 25,000 tonnes of CO2e/year, NEPA documents should include:167 measures to reduce GHG emissions, information about cumulative emissions over the lifetime of the project, a qualitative description of the link between GHG emissions and climate change, and reasonable alternatives. The memorandum
162 At 1028–1029.
does not discuss indirect emissions in great detail but notes that a methane venting coal mine would warrant discussion of alternatives and mitigation measures.168Commentators see the decisions above and this draft memorandum as having the potential to have “serious implications for coal development”.169 Although NEPA does not apply to state agencies, it sets the tone and direction for states to follow.
4. DENMARK
4.1 Introduction
Denmark is a small country with a land area of approximately 43,000 km2 and a population of 5.58 million.170 In the 1970s, the Danish energy system relied almost entirely on imported oil and coal.171 After the first oil crisis in 1973, there was a “radical conversion” of the energy system towards increased energy efficiency, and its own production of oil, natural gas and renewable energy.172 Since 1997, Denmark has been energy self-sufficient due to the extraction of oil and natural gas from the North Sea.173
Denmark has had a long history of wind power.174 There is little hydro or geothermal potential, and solar and wave power have not been developed on a large scale.175 The latter two sources of energy are expected to increase in the future, but only as supplements to wind and biomass.176 Currently, renewables account for 24.3 per cent of TPES177 and 47.7 per cent of electricity production is renewable.178
(June 2010) at 5.
(February 2011) at 11.
178 At 59.
4.2 Statutory Background
Denmark became a member state of the EU during its first enlargement in 1973.179 Member states share competence with the EU to adopt legally binding acts in areas of environment and energy,180 but only to the extent that the Union has not exercised its competence.181
The EU has demonstrated leadership in its efforts to reduce GHG emissions beyond the first commitment period under the KP. The “20-20-20” target sets three key objectives for 2020:
The first objective will be achieved through phase three of the EU Emissions Trading Scheme (EU ETS) and implementation of the “effort sharing agreement”. The former aims to reduce EU ETS emissions by 21 per cent below 2005 levels.184 The latter sets out annual emissions allocations for each member state in order to achieve a collective reduction of 10 per cent of nonEU ETS emissions below 2005 levels.185
The EU Directive on renewable energy encompasses the second objective. Each member state has a legally binding national target and an indicated trajectory.186 This was determined after considering the specific circumstances of each member state and the existing degree of renewable integration in the energy sector.187 For example, Denmark has a target of 30 per cent renewables by 2020, compared with the lowest target of 10 per cent for Malta.
187 Recital 15.
There is an intimate connection between EU law and domestic policies and legislation.188 The Danish government has been influential in pushing for stronger EU targets.189 As a “pioneer” in renewable energy,190 Denmark’s own policies, from as early as the late 1970s,191 have been favourable towards renewable energy.
The Energy Policy Agreement of 21 February 2008 was signed between the government and almost all of the parliamentary parties.192 This Agreement set a target of 20 per cent renewable energy of Denmark’s gross energy consumption by 2011.193 The Promotion of Renewable Energy Act, adopted in December 2008, was legislative affirmation of the 2008 Agreement.
In the most recent energy strategy, the Danish government has set a goal of fossil fuel independence by 2050.194 This is freedom from coal, oil and gas in the entire energy system: electricity, heating, industry and transport.195 Like most policies in this area, the Energy Strategy 2050 is premised upon the twin goals of energy diversification and security, and climate change mitigation.196 This goal is a GHG neutral energy sector, so Denmark can continue to import and export renewable and nonrenewable energy.197 The common Nordic electricity market is not affected. The use of coal is also allowed in conjunction with carbon capture and storage (CCS).198
The latest policy addition is the Danish Energy Agreement of March 2012. This Agreement aims for at least 35 per cent renewable energy in final energy consumption and a target of 50 per cent windgenerated electricity by 2020.199
191 At 159.
The 35 per cent goal is five per cent above Denmark’s commitment under the 2009 EU Directive.200 These renewable energy targets are aligned with the latest Climate Policy Plan that aims to reduce emissions by 40 per cent below 1990 levels by 2020.201 This “ambitious, but not too ambitious” target is necessary in light of the EU’s longterm goal of an 80 to 95 per cent reduction by 2050.202 Despite there being no comprehensive global agreement to reduce emissions, Denmark aspires to show the feasibility of the target to other nations.
4.3 Planning Regime
Because of the dominance of wind power in Denmark, only the planning regime for onshore wind turbines will be discussed.
Planning is carried out on three levels: nationally, regionally, and locally. Similarly to New Zealand, a hierarchical framework applies.203 Local plans must not contradict municipal plans, which in turn must be consistent with regional and national planning directives and legislation. On a national level, wind power planning directives (WPPD) are issued to provide specific planning guidance to help achieve the national energy goals.204
Regional spatial development plans are produced by the five administrative regions.205 Local planning takes place in each of the 98 municipalities through municipal and local plans. The municipal plan is the most influential planning instrument.206 It sets out the overall objectives concerning land use in the municipality,207 and project proposals that are likely to have significant environmental effects must be provided for in municipal plans along with an environmental impact assessment (EIA).208 An EIA is necessary for wind turbines greater than 80 metres in height or a cluster of three or more turbines.209
202 At 15.
All EIAs must assess the impact of the turbine(s) on neighbours, environmental and cultural effects, project alternatives and mitigation strategies.210The latest WPPD vests municipalities with the responsibility of planning new wind turbines up to 150 metres in height.211 Municipal plans designate specific wind turbine areas and commercial turbines cannot be developed elsewhere.212 As part of the 2008 Energy Agreement, municipalities were under an obligation to reserve areas for a windgenerating capacity of 75 MW in 2010 and 2011.213
In designating these areas, local councils must fully consider and balance the interest of climate change policy against neighbouring residential, nature, landscape, cultural and farming interests.214 Despite the pressure to expand and plan for longterm expansion of wind energy, the government believes that such a balance is possible.215 It was recommended that municipalities should identify and protect areas that are completely undisturbed by wind turbines.216
Local plans are adopted by municipalities to provide detailed and specific rules on how land can be developed and used.217 For most large wind energy projects, a local plan is produced.218
Both draft municipal plans and local plans involve a lengthy consultation process with various authorities and affected citizens.219 The draft plans and EIAs are made available and are often revised after the public participation phase.220 The public participation process helps to reduce litigation and community unrest.221 Affected property owners are always given notice,222 and the Minister for the Environment, the regional council and adjacent local councils can veto a proposed plan.223
Local council decisions can be appealed to the Environmental Board of Appeal. In most cases, the appeal board has competence to carry out a complete
216 At 34.
reexamination of a decision.224 The Environmental Board of Appeal has heard a number of cases regarding local council approval of small wind turbines.225 Such turbines of 25 metres or less are not subject to the latest WPPD or local plans and EIA requirements.226 In some cases, a reassessment of landscape and amenity values by the appeal board has justified a reversal of the council decision.227
4.4 Discussion
Renewable energy is favoured under the planning system as municipal plans must designate specific wind turbine areas which guarantee the future growth of wind power. This is not to say that local adverse effects are ignored. There is a duty to balance wind potential against all other environmental and social effects both at the municipal planning stage and when drafting an EIA.
Commentators have praised the benefits of mandatory designation. It allows for the balance of positive and negative effects in a given area, before a specific project is proposed.228 Effectively, concerned citizens have two rounds to raise concerns. Once during the designation consultation process, and again when an EIA and local plan is drafted for a specific project. Public participation and jointowned projects have helped to promote further wind development.229 The Promotion of Renewable Energy Act also introduced a loss in value scheme for neighbours of new proposed turbines to claim compensation for depreciation in property value.230 However, local support has been affected by the trend towards bigger, individually owned turbines.231
With land scarcity, it is foreseeable that the balancing exercise between interests will become harder. The government will explore the possibility of reduced distance requirements between wind turbines and roads and railways as part of the Energy Strategy 2050.232 In addition, new onshore turbines with
227 NMK3100788 15 March 2013 MAD 2013.596NMK.
a total capacity of 1800 MW are planned between now and 2020.233 Extreme care must be taken in the future to avoid the permanent loss of landscape and amenity values in some regions.
The renewable energy and emissions reduction targets apply equally to non renewable power stations. While individuals in New Zealand take responsibility for household heating, most Danes receive heating from the public heat supply.234
Local authorities develop heating plans.235 Climate change and energy efficiency were already relevant concerns in this area from the 1990s, as some oil and coalgenerated heat was converted to natural gas and biomass.236 Under the Energy Strategy 2050, the entire nation’s energy supply should be based on renewables by 2050. This means oil and coalgenerated heat is to be phased out by 2030, to be replaced by biomass and biogas.237 Electricity and heating will be 100 per cent renewable by 2035.238 The governmental message in these goals is crystal clear. Fossil fuels are not part of Denmark’s future energy supply.
Meeting these national targets will be challenging. For example, Copenhagen expects its electricity and heating supply to be based on wind, biomass and municipal waste by 2025.239 Currently, municipal waste contains large quantities of plastic waste.240 This is concerning as nonbiodegradable waste is not a renewable resource.241 There are plans for greater plastic separation in Copenhagen, which will result in a 12 per cent reduction in emissions from energy production.242 But drastic systems and behavioural changes are required so Danes “stop seeing rubbish as something we just throw away and burn”.243
233 At 32.
234 DEA “Basic facts on heat supply in Denmark” <www.ens.dk>. 235 DEA “District Heating: Actors and prices” <www.ens.dk>.
236 DEA “Environmental concerns and electricity growth in the 1990s” <www.ens.dk>. 237 Energy Strategy 2050, above n 172, at 33–34.
<cphpost.dk>.
The Danish government will continue oil and gas exploration in the North Sea. The lure of economic growth is too strong, and such exploration has been “crucial” to the Danish economy.244 Future tendering rounds, deeper exploration, improved extraction rates and extraction from chalk fields are on the cards.245 Energy efficiency and local ecological effects of exploration are the only environmental concerns currently being addressed.246 Climate change does not seem to be a relevant factor in decisionmaking.
From an emotive and ideological standpoint, it is easy to attack this position on exploration. The Danish government aspires to be fossil fuel free but is actively providing resources to support fossil fuel dependence in other countries. On the other hand, it is impossible to wean the world off fossil fuels overnight as oil and gas supplies are needed to meet the growing energy demand with population growth and the industrialisation of China and India.
Oil and gas exploration is governed centrally. But the permitting of shale gas resources is shared between national and local authorities.247 End use considerations are filtering into the municipal decision-making process. In February 2013 the municipal council of Frederikshavn voted for a full EIA to be prepared prior to explorative drilling.248 This decision goes against the Danish Energy Association’s recommendation that an EIA is not required if hydraulic fracturing is not involved. It is the first time in Danish history that a full EIA has been required for ordinary exploration drilling on land.249 This decision indicates that the tide is turning, at least for onland fossil fuel extraction.
5. COMPARATIVE ANALYSIS AND RECOMMENDATIONS
5.1 Policies and Targets
New Zealand is a much smaller contributor to global emissions than the EU and California.250 This difference is reflected in the strength of GHG reduction targets and legislation. Both the EU and California have pledged to be a world
245 At 45.
leader in emissions reduction and climate mitigation.251 In comparison, New Zealand’s objective is “neither to lead nor lag” but to do its “fair share” in addressing climate change.252 This is a reversal of earlier governmental policy. For example, in 2006 the Labour government aspired for New Zealand to become carbon neutral.253The EU has set a 20 per cent emissions reduction target below 1990 levels by 2020. Denmark has further committed to a more ambitious 40 per cent reduction target. In addition, the EU and California have set a longterm target of 80 per cent reduction below 1990 levels by 2050. In comparison, New Zealand’s targets are significantly weaker. On 16 August 2013 the government announced an unconditional five per cent reduction target below 1990 levels by 2020. This is accompanied by the 2020 conditional target of 10 to 20 per cent if a comprehensive global agreement is reached. The target is conditional upon certain stringent requirements, such as that “developed countries make comparable efforts to those of New Zealand”.254
New Zealand’s total emissions have increased by 25 per cent since 1990.255 Emissions in the electricity sector have increased by 91 per cent and transport by 70 per cent.256 Nevertheless, New Zealand is alleged to be on track to meet its KP obligations under the first commitment period due to forestry sinks planted in the 1990s.257 As these forests are due for harvest around 2020, future obligations will be much harder to meet.258
New Zealand’s 2050 target of a 50 per cent emissions reduction is ambitious. But it cannot be taken seriously as the 2020 binding target is only five per cent. Without ambitious shortterm targets, the technology, infrastructure and behavioural changes will not be in an advanced state to meet the 2050 target.
New Zealand’s small contribution to global climate change can no longer be used as an excuse for inaction. First, we are amongst the top five of Annex I
2012 (Nairobi) at table 2.1. This is based on global emissions in 2010 from the Emissions Database for Global Atmospheric Research.
<beehive.govt.nz>. See also Ministry for the Environment Gazetting New Zealand’s 2050 Emissions Target: Minister’s Position Paper (January 2011).
258 2020 Emissions Target, above n 256, at 2.
countries for per capita emissions.259 Therefore, on a per capita basis, the country’s climate change contribution is disproportionately large. Secondly, other developed countries with a similar share of global emissions, such as Norway260 and Switzerland,261 have much stronger targets, with unconditional 30 per cent and 20 per cent pledges respectively.262
Recommendation 1: New Zealand should increase the 2020 binding target to 20 per cent below 1990 levels. This target is in line with the EU’s commitment and will force the government to actively mitigate climate change, instead of relying on carbon sinks.
5.2 Statutory Background
The New Zealand planning system is akin to Denmark’s. Both countries have a hierarchy of planning documents. In general, both systems vest permitting power in local authorities, with the exception of offshore projects in Denmark and the callin provisions under the RMA.263 The permitting authority is centralised in California for thermal power plants, but for other energy applications, permitting takes place on the local county level.
To foster the policy goals above, both Denmark and some Californian counties promote renewable energy through the designations of wind farm areas in local plans. This is beneficial for a multitude of reasons, identified in part 4 above.
The other significant difference is the mandatory EIR or EIA content requirements in California and Denmark. This contrasts to the RMA, where the requirement to prepare an assessment of environmental effects (AEE) under s 88 and sch 4 is mandatory, but the content is not. This is why the Buller Coal AEE prepared by L&M Coal Ltd omitted to mention climate change as an indirect effect of coal mining.264 If the NEPA guidance memorandum on GHG considerations is adopted in New Zealand, projects like Greenpeace would have to address, inter alia, GHG reduction measures and reasonable alternatives. This
261 0.12%, at table 2.1.
approach would lead to better decisionmaking and stronger environmental protection.
Recommendation 2: District plans should specifically zone for wind farms. The RMA should introduce guidelines on mandatory AEE content requirements.
The EU’s 202020 package, along with the CCS Directive,265 help to support the overarching emissions reduction targets. Denmark’s Promotion of Renewable Energy Act also complements the national targets. In California, the RPS and EPS requirements are supported by federal regulation under the Clean Air Act and the draft NSPS. The PSD requirement under the Clean Air Act gives state authorities the power to impose conditions to limit emissions.
In contrast, New Zealand’s “main policy tool” to meet the 2050 emissions reduction target is the New Zealand Emissions Trading Scheme (NZ ETS).266 However, the Parliamentary Commissioner for the Environment has said that there is “no way” that the current ETS will help achieve the 2050 target and described the scheme as a “farce”.267 The NZ ETS has been criticised as being “too soft on big polluters”.268 Without a cap on total allowable emissions, the NZ ETS lacks the essential element of a capandtrade system.269 It is uncomparable to the EU counterpart, where the cap is to decrease annually from 2013 onwards.270 Participants can pay a measly $25 per tonne of CO2 emitted instead of surrendering units,271 polluters only have to pay for half of what is emitted under a twoforone subsidy,272 and the phaseout of free allocations has been halted.273 The agricultural sector is the contributor of almost half of all emissions,274 but the start date for unit surrendering obligations has been removed.275
269 At 6046.
2013) <climatechange.govt.nz>.
Other “complementary” policies include the Energy Efficiency and Conser- vation Authority (EECA) work programme and New Zealand’s involvement with the Global Research Alliance on Agricultural Greenhouse Gases.276 These measures are examples of “soft” policy and contain few binding obligations. The EECA has introduced minimum energy performance standards,277 labelling requirements for vehicle fuel economy, and a “Warm Up New Zealand” insulation scheme.278 These initiatives are a good start. But the objectives and targets identified in the new Energy Efficiency and Conservation Strategy are weak compared with the EU Energy Efficiency Directive.279 Drafted with language such as “encourage” and “support”, few policies attach concrete obligations.
Recommendation 3: The NZ ETS requires amending. In addition, a suite of policies is needed to support the overarching goals and targets.
Denmark has the “welldeserved” title of being a world leader in renewable energy development.280 Its success has been attributed to investments in research and development and economic support schemes. In addition, the local ownership, compensation and wide public participation schemes have helped to build social acceptance.281
But the biggest contributing factor to Denmark’s success is the “clear, stable and favourable legal framework”.282 The longterm energy plans, such as the 2008 Agreement and the Energy Strategy 2050, are critical for stability and security for investors.283 The planning system is unambiguous. The vertically integrated structure of national, regional and municipal plans prevents “gaps” from forming between national energy policy objectives and local actions.284
In contrast, New Zealand lacks political consensus on the nation’s approach to tackling climate change. Such consensus is crucial in order to facilitate serious technological investment and system changes.
281 At 351.
Recommendation 4: Parliament should endeavour to develop a crossparty, longterm climate change response strategy.
5.3 Case Law
In California and Denmark, there is consistency between how decisionmakers treat renewable energy projects and nonrenewable energy projects. This is the key difference when compared with the New Zealand approach.
In New Zealand, local authorities cannot consider the effect of GHGs on climate change for discharge applications. In California, whether a fossil fuelled power plant is permitted depends upon the compatibility of the project with state climate change policies and emissions reduction targets. Likewise in Denmark, EU directives and policy documents such as the Energy Strategy 2050 are actively phasing out nonrenewable energy projects for climate change reasons.
Ultimately, the author agrees with the Supreme Court decision in Greenpeace based on the legislative intent and purpose of the RMAA 2004. The majority interpretation is also the more natural reading of s 104E. But the author disagrees with the outcome from a normative point of view, especially as the preferred national regime of regulating emissions is so inadequate. The current position gives nonrenewable energy applications an unfair advantage over renewable energy projects as the disbenefits of fossil fuels escape scrutiny but the disbenefits of renewable energy do not.
This is an extremely complex issue that cannot be fully explored in this article. Each of the three jurisdictions has a slightly different stance on indirect GHG emissions.
California takes the strongest position, where failure to consider such indirect effects in EIRs can be challenged under CEQA or NEPA. This is the case if the emissions are ultimately released domestically. For extraterritorial emissions, the law is less established.285 The limitation of such claims is that even if the decision is remitted for reconsideration, the decisionmaker can come to the same conclusion the second time around.
In Australia, case law has established a position that is similar to California. In the wellcited Gray v The Minister for Planning, Justice Pain in the New South Wales Land and Environment Court held that the downstream (domestic
and overseas) combustion of coal and the resulting GHG emissions are relevant in assessing the environmental impact of a proposed coal mine.286 In Australian Conservation Foundation v Latrobe City Council, the Victorian Civil and Administrative Tribunal held that the effect of indirect GHG emissions of a coal-fired power station is relevant when deciding whether to amend planning rules to facilitate mining in coalfields that supply coal to this power station.287 New Zealand’s approach in Buller Coal is inconsistent in light of these overseas examples. In addition, comments made by the Supreme Court further undermine public confidence in New Zealand’s commitment to tackling climatechange. It was acknowledged that:288
... given New Zealand’s comparatively low contribution to worldwide GHG emissions and the infinitesimal contribution which any particular project could make, there could be no demonstrable linkage between GHG emissions associated with any particular project and climate change generally.
This statement is alarming. All projects release minuscule GHG emissions in comparison to global emissions. Yet this is no reason for inaction — a point endorsed by the United States Supreme Court.289 It is disappointing that the majority judges in Buller Coal failed to see climate change as a global collective problem.
Legislative amendment is clearly needed to achieve more positive environ mental outcomes. One option is to simply repeal the muchdebated sections of the RMA, ss 70A, 70B, 104E and 104F, to remove the prohibition against climate change considerations for discharge applications. However, in order to foster the goal of clear and consistent legislation, the best option is to repeal the RMAA 2004 as a whole. Whilst certain provisions, such as the s 7 matters, should remain, the Amendment Act is inherently contradictory. One commentator saw it as “one of the more curious pieces of legislation on climate change that has been introduced internationally”.290 Sections 70A and 104E are not drafted in plain and simple language that can be understood by lay people.
William Young J.
Under the existing ss 70B and 104F, consent authorities could consider the effect of GHGs on climate change if a NES regulated such effects.291 A regional council could also make rules to implement the NES.292 Though the Court of Appeal in Greenpeace and the High Court in Buller Coal envisaged the future promulgation of a NES,293 there is still no sign of one on the horizon. This is disappointing as a decade has passed since the enactment of the RMAA 2004. Under a cleanslate approach to climate change considerations under the RMA, a NES should be promulgated under the existing framework under s 43. A NES would help to achieve consistency between local decisionmakers, thus removing the fear of ad hoc regional GHG regulation.294 It can provide guidance on appropriate GHG consent conditions such as financial compensation,offsetting, and the interaction between RMA regulation and the ETS.295
Recommendation 5: Repeal the RMAA 2004 in its entirety and promulgate a NES as soon as practicable.
A major concern for New Zealand courts has been the “duplication of effort” of national and regional government if GHG effects are regulated under the RMA and the ETS.296 This is certainly a relevant concern if the Denniston coal is to be burnt domestically, or exported to an Annex I country under the KP. Annex I countries are obliged, under the UNFCCC, to have GHG mitigation measures in place. For example, under the NZ ETS, emission units are surrendered for domestically combusted coal, and for fugitive gases.297 But there is no obligation to surrender units for exported coal.298
The problem arises where coal is exported to nonAnnex I countries. As the Denniston coal is planned to be exported to mostly India and China,299 there is no double regulation. Regrettably, as the RMA was held not to apply, the end use effects of the combustion of Denniston coal will be completely unregulated and unaccounted for. Arguably in these circumstances, climate change considerations should remain a valid consideration for domestic coal mining projects.
299 Buller Coal SC, above n 6, at [14].
The RMA is certainly capable of considering extraterritorial effects. The ministerial power to call in matters of national significance is strong evidence for this conclusion. Under s 142(3)(a), in deciding whether a matter is of national significance, the Minister may have regard to “actual or likely effect on the environment (including the global environment)”.300The NES, under Recommendation 4, can specify when and to what extent local authorities can regulate extraterritorial GHG effects. For example, decisionmakers could place varying degrees of weight on the climate change argument, depending on the existence and strength of emissions mitigation and reduction targets in the country of combustion.
Ideally, all UNFCCC parties will have emissions reduction obligations. In 2012, parties committed to a new binding protocol by 2015, to be in force in 2020. When such a protocol is in force, this kind of proposed regulation may no longer be necessary. But until then, doing our “fair share” requires consideration of unregulated GHG emissions that arise from our domestic coal industry.
In the current political climate, reform in this area is unlikely. The recent Energy Strategy emphasises the need to make the most of New Zealand’s energy potential through the development of petroleum and mineral fuel resources.301 “The Government wants New Zealand to be a highly attractive global destination for petroleum exploration and production investment.”302 Therefore it seems unlikely that extra regulation will be imposed on fossil fuel extraction and use.
6. CONCLUSION
New Zealand must follow California and Denmark in striving for horizontal and vertical consistency between highlevel policy, law, planning and case law. Horizontally, unlike the other jurisdictions, the solid renewable electricity target in New Zealand is not supported by a strong commitment to reduce emissions. Because of the government’s “fair share” attitude and its oil and gas exploration plans, the weak 2020 target is reflected in law and regulations.
In New Zealand, it is clear that the targets and goals are not supported by a planning framework that favours renewable energy, nor are the targets backed up by a package of energy efficiency initiatives. Regarding on-the- ground projects, the government’s unwillingness to deal firmly with climate change has resulted in case law that is unsatisfactory from a climate change
300 RMA, s 142(3)(a)(i).
mitigation point of view and undermines any form of national commitment to tackling climate change.A cascade of changes is needed in order to combat irreversible climate change. Part 5 above suggested the following recommendations:
(1) Stronger shortterm emissions reduction targets are needed to address New Zealand’s high per capita emissions.
(2) This policy goal should be supported by specific wind farm zoning303 and mandatory AEE content requirements.
(3) The NZ ETS should be amended and other measures to support the overarching policies and targets should be introduced.
(4) Crossparty support for longterm climate action is needed.
(5) The RMAA 2004 should be repealed and a new NES promulgated.
Local authorities should have the mandate to plan for the effects of climate change, and also to mitigate it. A new NES can give guidance on the role of climate change concerns in energy applications and on appropriate consent conditions. This NES can help create a national GHG regulation scheme that is actually effective at reducing emissions. For Buller Coallike applications where the discharge takes place extraterritorially, climate change should be a valid consideration, at least until a comprehensive global agreement is reached.
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