The Supreme Court, in its first climate change decision, has found against Greenpeace’s argument that consent authorities should, in some circumstances, consider the negative effects of greenhouse gas (GHG) emissions when assessing resource consent applications under the Resource Management Act 1991 (RMA).
The Greenpeace New Zealand Inc v Genesis Power Limited  NZSC 112 judgment marks the end of a rollercoaster ride through the courts on a question of statutory interpretation under the RMA.
Section 104E of the RMA is the focus of the case. The section prohibits consent authorities from considering the effects of GHG emissions on climate change when assessing discharge applications, but with one qualification - “except to the extent that the use and development of renewable energy enables a reduction in the discharge into air of greenhouse gases”. The key issue before the Court was whether the effect of GHG emissions on climate change is relevant to applications that do not involve the use and development of renewable energy.
The Supreme Court case arose from Genesis Power Limited’s proposed gas-fired power station at Rodney. Genesis sought a declaration from the Court of Appeal on whether Auckland Regional Council could have regard to the effects of the discharge to air of GHGs when considering the application by Genesis. This followed an earlier decision of the High Court, in relation to Mighty River Power Limited’s proposed Marsden B coal-fired power station, that the benefit of GHG reductions from the use of renewable energy is potentially relevant to all discharge applications, whether or not they propose the use of renewable energy.
Court of Appeal’s decision upheld
In a split decision, a 4:1 majority of the Supreme Court upheld the Court of Appeal’s interpretation of section 104E of the RMA and dismissed Greenpeace’s appeal. The majority of the Supreme Court agreed with the Court of Appeal that the exception should be interpreted as applying only to consent applications involving renewable energy. The majority based their conclusion on an analysis of the language of the section, as well as considering the purpose of the legislation and relevant Parliamentary background material.
Chief Justice Elias dissented. In a minority opinion roughly twice the length of the majority’s decision, Elias CJ held that GHG reduction benefits from the use and development of renewable energy are equally relevant to non-renewable and renewable energy applications.
What does the decision mean?
At the most immediate level, the Supreme Court’s decision affects how consent authorities under the RMA will treat applications involving discharges of GHGs. Essentially:
- Discharge applications involving renewable energy – the benefits of renewable energy and resulting GHG emission reductions are factors to be considered in the application’s favour.|
- All other discharge applications (including for non-renewable energy projects, such as coal or gas fired power stations) – the ‘disbenefits’ of GHG emissions cannot be considered.
The Supreme Court’s decision is timely, given the National Government’s recent repeal of the 10-year ban on new thermal power stations. The Electricity (Renewable Preferences) Repeal Act 2008, which came into force just before Christmas, has opened the doors again for new base load fossil-fuel electricity projects.
Rules in regional council plans are also affected. This is because section 70A of the RMA, which deals with regional council rules, is drafted in similar terms to section 104E. When making rules on the discharge of GHGs, regional councils may only have regard to the effects on climate change when making a rule which controls an activity involving the use and development of renewable energy.
Spotlight on national action
The Greenpeace decision also focuses attention on national policies to address climate change. The majority of the Supreme Court consider that the underlying policy of the legislation that introduced the section (the Resource Management (Energy and Climate Change) Amendment Act 2004) was to “require the negative effects of greenhouse gases causing climate change to be addressed not on a local but on a national basis while enabling the positive effects of the use of renewable energy to be assessed locally or regionally” (para 55). The decision therefore throws a spotlight on the Government’s national policies on dealing with GHG emissions, such as the Emissions Trading Scheme which is currently under review. The RMA also provides for national action in the form of national environmental standards to control the effects on climate change of GHG emissions.
Whatever happens on the national stage, applicants seeking consent under the RMA for GHG discharges at least now have the benefit of legal certainty over the meaning of section 104E. Aside from implications for major electricity generation projects, for applicants seeking discharge consents for any industrial activities involving GHG emissions, the Supreme Court’s decision also removes the spectre of having to justify non-renewable energy use and engage in (potentially costly) hypothetical comparisons as part of their applications.