An Australian first: NSW EPA ordered to take action to address climate change

In a landmark ruling with potentially far-reaching implications, the NSW Land and Environment Court (LEC) has ordered the State's Environment Protection Authority (EPA) to take specific steps to address climate change. This is the first time an Australian court has directed a government agency to take action to address climate change.

On 26 August, Chief Justice Preston of the LEC handed down the decision In Bushfire Survivors for Climate Action Incorporated v. Environment Protection Authority [2021] NSWLEC 92 (BSCA v EPA), ordering the NSW EPA to develop environmental quality objectives, guidelines and policies to ensure the protection of the environment in NSW from climate change. The Court recognised, however, that there was a discretion as to how to discharge its duty to develop such instruments.

The legal challenge

Bushfire Survivors for Climate Action (BSCA), a group of Australians impacted by NSW's devastating 2019/20 bushfires, brought proceedings in the LEC alleging the EPA had failed to perform a statutory duty to develop certain instruments to ensure the protection of the environment from climate change.

The duty was said to be imposed by section 9(1)(a) of the Protection of the Environment Administration Act 1991 (NSW) (POEA Act), requiring the EPA to "develop environmental quality objectives, guidelines and policies to ensure environment protection".

BSCA argued that, given the threat posed by climate change, there is no "evident or intelligible justification" for the EPA not having developed a policy addressing climate change when it is charged with the duty to ensure environmental protection.

In response, the EPA argued that section 9(1)(a) did not require it to prepare objectives, guidelines and policies to address any particular environmental problem, such as climate change. Alternatively, the EPA argued that even if section 9(1)(a) did require this, it had already done so through existing instruments.

The EPA's duty

Justice Preston held that the POEA Act does impose a duty on the EPA to develop environmental quality objectives, guidelines and policies to ensure the protection of the environment in NSW and, in the current circumstances, this includes a duty to develop these instruments to ensure the protection of the environment from climate change.

Justice Preston held that the legislation does not go so far as to demand that such instruments contain the level of specificity contended for by BSCA, such as regulating sources of greenhouse gas emissions (GHG emissions) in a way that is consistent with limiting global temperature rise to 1.5°C above pre-industrial levels. Instead, his Honour held that the EPA has discretion as to the specific content of the instruments it develops to fulfil its duty.

An evolving duty

The judgment points out that "environment protection" is a wide concept that is tied to the objectives of the EPA (set out in section 6 of the POEA Act), "referring to any action to protect the environment by such means as conserving the environment, preventing and remedying harm to the environment, and restoring the quality of the environment". Importantly, the objectives under the POEA Act specifically require the EPA to have regard to the need to maintain ecologically sustainable development, which encompasses the precautionary principle, inter-generational equity, conservation of biological diversity and ecological integrity and improved valuation, pricing and incentive mechanisms (including the "polluter pays" principle).

Justice Preston emphasised that the duty in section 9(1)(a) of the POEA Act was intentionally drafted using broad language, and so its effect will evolve over time and place in response to changes in the threats to the environment. The duty requires identification of the key current environmental threats in NSW.

His Honour then pointed to the BSCA's uncontested expert evidence, and the most recent IPCC reports, to conclude that "at the current time and in the place of New South Wales, the threat to the environment of climate change is of sufficiently great magnitude and sufficiently great impact as to be one against which the environment needs to be protected".

Breach of duty

His Honour found that the EPA had failed to fulfil its duty to protect the environment of NSW from the threat of climate change because none of the instruments it presented adequately provided for protection from climate change. The documents presented by the EPA were either not prepared by the EPA (and so it could not rely on them to meet its statutory duty) or were "directed towards ancillary or insignificant causes or consequences of climate change" and not sufficient to discharge the duty in section 9(1)(a) of the POEA Act.

The Chief Justice concluded that it was appropriate to issue an order to compel the EPA to perform its duty.

An Australian first, following a global trend

Globally, climate litigation is playing an increasingly significant role in holding governments to account over pollution and climate change and promoting further development of domestic climate-related legislation and policy. Courts around the world are making orders pushing governments to do more to address climate change.

One of the world's first major successful climate change cases, Massachusetts v EPA, was similar to BSCA v EPA. In this 2007 US case, the state of Massachusetts, along with other US States, sued the Federal US EPA seeking to require it to regulate greenhouse gases, such as carbon dioxide, as "air pollutants" under the Clean Air Act. Section 202(a)(1) of the Clean Air Act stated that the EPA is to set emission standards for "any air pollutants" from new motor vehicles "which in [the EPA's] judgment causes[s], or contribute[s] to, air pollution which may reasonably be anticipated to endanger public health or welfare". The Court held that, under the language of the Clean Air Act, the EPA had authority to regulate greenhouse gases as "air pollutants". The US EPA has subsequently taken steps to regulate motor vehicle GHG emissions.

Internationally, the interpretation of human rights has also moved to include climate change and governments, businesses and organisations are being held to have an unwritten duty of care to protect people from climate change. In June this year, a Dutch district court ordered a corporation, Royal Dutch Shell, to cut its direct and indirect emissions by at least 45% at the end of 2030, relative to 2019 levels.

This comes six years after the Dutch Supreme Court held that the Netherlands Government's inadequate action on climate change breached a duty of care it had to its citizens and ordered the government to cut GHG emissions to 25% lower than 1990 levels by 2020 (Urgenda Foundation v State of the Netherlands, Supreme Court 20 December 2019, ECLI:NL:HR:2019:2006).

In Australia, the Federal Court also recently ruled that, when deciding whether or not to grant approval to a coal mining project, the Federal Minister for the Environment owed a duty of care to all children under the age of 18 in Australia to avoid causing them personal injury as a consequence of increased carbon dioxide emissions. In the Sharma case, the Federal Court expressly left open the question of whether this duty of care could apply in other scenarios.  That decision could lead approval authorities to apply greater scrutiny to the assessment and determination of approvals that would result in significant additional greenhouse gas emissions.

Implications and takeaways

BSCA v EPA is the first time an Australian court has ordered a government agency to take action to address climate change. While the decision emphasises that the EPA has a discretion as to the specific content of the instruments it must develop, Justice Preston provided some indications of the types of things the EPA might include in its instruments.

For example, in examining one of the documents which the EPA presented to demonstrate it had fulfilled its duty to address climate change – the EPA's Regulatory Strategy 2021-2024 – Justice Preston listed the following matters which his Honour would expect to see in a document to satisfy the EPA's duty under section 9(1)(a) with regard to the mitigation of GHG emissions:

• the sources of GHG emissions within the EPA's regulatory control;
• the major industries which are the sources of GHG emissions;
• the current or future desired levels of greenhouse gases emitted by these sources and industries;
• the timing for and rate of reduction of GHG emissions by these sources and industries; or
• the measure, approaches or tools to be used to achieve reduction of GHG emissions.

His Honour also considered the EPA's closely related duty in section 91(1)(b) of the POEA Act – to "monitor the state of the environment for the purposes of assessing trends and the achievement of environmental quality objectives, guidelines, policies and standards". This, combined with the extensive set of facts which BCSA and the EPA agreed about climate change threats, provides added impetus for policies to actively address climate change.

Although this is a NSW ruling considering a NSW law, this decision opens up the possibility of similar challenges in other Australian jurisdictions, and will prompt other Australian environmental authorities to consider whether their regulatory approaches on climate change are sufficient to meet what the legislation in their respective jurisdictions requires.

The decision paves the way for more targeted climate change policies in NSW and other Australian State and Territory Governments. In NSW, for example, this may lead the EPA to apply a stronger regulatory focus on GHG emissions through its existing regulatory tools, such as environment protection licences.

It's also important to consider the potential regulatory responses from both a mitigation perspective (ie. GHG emissions reduction and sequestration) and a management perspective (ie. climate change resilience).