Last week, the Court of Appeal dismissed a judicial review challenge brought against the Climate Change Commission (Commission) by Lawyers for Climate Action New Zealand Incorporated (LCANZI).[1]
LCANZI had alleged that the Commission's May 2021 advice to government in connection with New Zealand's domestic emissions budgets and the first nationally determined contribution under the Paris Agreement (Advice), together with subsequent Ministerial decisions based on the Advice, was unlawful.
While the case focussed on Advice given to, and decisions made by, the previous Government, the judgment has ongoing relevance to New Zealand's approach to emissions reduction. For example, the statutory provisions that were in issue are central to the ongoing process of setting and monitoring emissions budgets, and accordingly the Court's findings in relation to how that exercise must be conducted will inform future decisions.
In addition, the Court considered a number of points that have broader relevance to parties to judicial review proceedings, whether in the climate context or otherwise.
Taken together, the findings in this case are broadly consistent with the recent direction of travel in climate change judicial review proceedings. While the courts will readily intervene where a decision-maker has failed to comply with an express or implied requirement of the statutory decision-making power (as was found to be the case in LCANZI's earlier challenge to Ministerial decision-making around ETS pricing), they will typically be slower to interfere where the decision-maker has a level of discretion. Of course, the question of what the statutory scheme requires a decision-maker to do will often be a matter for debate (as it was in this case), and accordingly we expect to see continued administrative law challenges in this area. For a more detailed analysis of judicial review cases in the climate change context, see our earlier update here.
Our further key takeaways from the decision from both a climate change and judicial review perspective are set out below. Should you wish to discuss the implications of the decision further, please get in touch with one of the experts below or your usual Russell McVeagh contact.
Key takeaways – climate change
The key takeaways from the decision from a climate change perspective include:
- Gross-net issue: One of the key issues in the case was whether the Commission made a logical or mathematical error in advising the government on whether New Zealand's nationally determined contribution (NDC) was compatible with the 1.5 degree temperature goal at the heart of the Paris Agreement. LCANZI alleged that the Commission had erred by comparing:[2]
- emissions pathways from the Intergovernmental Panel on Climate Change (which are prepared on a "net-net" basis, meaning that both gross emissions and emissions removals are taken into account in both the base and target years); and
- the NDC (which is prepared on a "gross-net" basis). The use of "gross-net" accounting for New Zealand's emissions is designed broadly to reflect comparatively high levels of removals from forestry in the base year of 1990, but this approach has been the focus of some scrutiny from climate commentators.[3]
The Court did not consider this to be a logical or mathematical error, because the Commission had intended to use the international modelling as an indirect comparator and this was understood by the Minister. [4]
- The 1.5 degree goal: The Court rejected LCANZI's argument that the Commission had misinterpreted the statutory purpose of the CCR Act in advising on emissions budgets. The Court agreed with the High Court that the reference to the 1.5 degree goal in the purpose section of the CCR Act does not create a substantive bottom line requirement (although this does guide the decision-making process).[5]
- Accounting methodology: The Court determined that it was lawful for the Commission to use the "modified activity-based" (MAB) method of accounting for measuring progress against New Zealand's emissions budgets and targets in the CCR Act, and that "land-based" accounting was not required.[6]
- Reasonableness of the Advice: The Court rejected the allegation that the Advice was "unreasonable" in the judicial review sense. This aspect of the claim was largely dependent on the three issues above, and so largely fell away as a result of the Court's earlier conclusions. [7]
Key takeaways – judicial review
In addition, the Court considered the following key points that have broader relevance to judicial review proceedings outside of the climate change context:
- Amenability to review: The Court determined that the Advice was amenable to judicial review, despite being advisory in nature.[8] Specifically, the Court considered that the Advice fell readily within the ambit of a "statutory power of decision" (and therefore amenable to review) because the Advice was of "central importance" within the statutory scheme in the CCR Act. The Advice was required to be presented to Parliament, and the Minister was required by statute to respond to it. The Court noted, however, that only those errors of fact or law in the Advice that would have a material effect on the Minister's decision would render the Advice unlawful.
- Intensity of review: While stopping short of deciding the matter, the Court briefly considered whether the level of scrutiny applied in judicial review cases should vary depending on the subject matter. This has been the source of some judicial debate, with some earlier decisions considering whether "heightened scrutiny" may be appropriate in climate change cases.[9] The Court noted that it was not particularly attracted to the idea of a varying intensity of review but observed that the reasonableness of a particular decision, and the legal requirements applying to it, will depend on the factual and legal context.[10]