Back in the bad old days of a New South Wales state government that was ‘blessed’ with environmental warrior (and thereby economic saboteur) Matt Kean as minister for the environment and energy, it was deemed a good idea, in the name of saving the planet, to make things as difficult as possible for those seeking to earn billions of dollars for Australia (and taxes for the federal Treasury and jobs for many thousands) by exporting coal. This was particularly galling for our Asian neighbours who relied on it, and still do –  even more so now with unprecedented booming demand (see this column on 9 October) for their energy security.

So rather than introducing new legislation, the government resorted in November 2021 to the trick of making regulations with the force of law under cover of the long-standing existing Environmental Planning and Assessment Act 1979. The regulations were entitled ‘State Environmental Planning Policy (Resources and Energy) 2021’. Last week this boil on the posterior of progress received the attention of five justices of Australia’s High Court who disagreed, three-to-two, about whether a NSW state government-approved major extension of the huge Mount Pleasant thermal export coal mine was legal, the approval process having been found in lower courts to have failed to  meet the requirements of Matt Kean’s regulatory masterpiece.

Regrettably, the majority (which did not include the Chief Justice) decided against the coal mine extension, in three separate lengthy judgments. Hailed as a triumph by an eager throng of environment activists sensing the opening of Australia’s top legal door to environmental lawfare (often government-funded) against all fossil fuel export projects (but especially coal), it was greeted with widespread horror by the private sector – in descending levels of hyperventilation relating to how much of these four separate judgments had actually been read. The fear was that the High Court had opened up the door for environmental judicial activism against the crucial Scope 3 emissions that result from the burning of Australian exports of fossil fuels in foreign lands.

Both sides were wrong. The majority (of one) did not ban the development. It merely used a questionable interpretation of the meaning of an ill-considered sentence in a NSW regulation (not an act of parliament) to refer the approval process back to the NSW system to correct what it ruled to be an error in its approval process, with no implications outside NSW. The High Court did not even consider the crucial ‘global warming’  political issue of the impact of proposed emissions on the local region, describing it as ‘neither necessary nor appropriate’ to do so. The specific nature of the referral back to the NSW Land and Environment Court limits the prospect of its resurrection

The majority avoided, apart from an occasional lapse as an aside, dealing with the merit or otherwise of selling coal overseas at a time when the Albanese Labor government’s environmental commitment to net zero, the Paris agreement and the transition out of fossil fuels has just funded Climate Change and Energy Minister Chris Bowen’s Fiji sleepover, a precursor to his semi-leadership role (second prize after his the failure of his bid for Australia to host it) attending Cop31’s upcoming Turkish talkfest aimed at setting more unachievable national targets for greenhouse gas emissions.

The issue over which the High Court split was whether the NSW approval had met Matt Kean’s regulatory requirement to consider if ‘the consent should be issued subject to conditions aimed at ensuring… that greenhouse gas emissions are minimised to the greatest extent practicable’ (a word that each side interpreted differently) and whether there was evidence that the approving authority had given the statutorily required consideration to doing so.

Chief Justice Gageler and Justice Jagot jointly agreed that the NSW approval, with the conditions it imposed on the proposal’s Scope 1 and Scope 2 greenhouse gas emissions, met this requirement in the context of  applicable international, national and State agreements and policies, ensuring that all its greenhouse gas emissions (including Scope 3 that make up 98 per cent of the project’s planned output) would be minimised to the greatest extent practicable.

This is on the basis that under the Paris Agreement, Scope 3 emissions are attributed to the country within which they are emitted and that these countries, all prospective buyers of Mount Pleasant coal, have committed to reducing global greenhouse gas emissions and to track their progress in doing so. The inference is not only that it is therefore impracticable to seek to impose conditions on these emissions extra-territorially, but also that the Paris Agreement is supposed to be doing that job in Australia’s export markets.

In any event, the original approval had concluded that the project’s Scope 3 emissions were appropriately regulated and accounted for through broader national policies and international agreements and would not contribute to Australian greenhouse gas emissions or factor into Australian greenhouse gas reduction targets.

In the majority judgments, there was no doubt that the Kean requirement had not been met resulting in the approval process being sent back to NSW to correct the ‘judicial error’ by ensuring the issue is considered, even if no action follows. ‘There is no basis upon which it may be inferred that the NSW Planning Commission considered that issue…. That error was “material” in the sense that there was a realistic possibility that the (NSW) decision that was in fact made could have been different if the error had not occurred.’ No evidence is presented to back that guess. As the Australian Financial Review noted, ‘Nowhere did they say that conditions actually had to be imposed – just that they had to be “considered”.’

But at least the majority view concedes that the requirement that the Planning Commission consider imposing conditions to ensure that greenhouse gas emissions are minimised to the greatest extent practicable recognises that the imposition of such conditions will not always be possible or desirable and that their decision is on process only that ‘does not invite a court to undertake any form of review of the merits of a decision’. And in a clearly negative message to environmental activists, ‘it is, and was, not the function of this Court… to assess the environmental effects of any of the emissions’ relating to this project or to address the merits, or otherwise, of the Commission’s decision to grant consent.

Meanwhile, Matt Kean, the ‘Liberal’  architect of this contentious statutory burden on mining (with fears it may spread to drilling) is busily pursuing his environmental campaign as the Labor-appointed chair of the Climate Change Authority.