The UK’s Airports National Policy Statement was “deliberately silent” on the Paris Agreement, she continued, and therefore did not comply with national planning laws by virtue of ignoring an international agreement that forms part of government policy. As such, the Court of Appeal declared the development of the new runway unlawful.

Implications for Australia

When asked about the implications for Australian law, Ms Peacock said that the ruling confirms that international agreements on climate change form part of domestic climate policy.

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“This could have an impact on what it means to make a lawful administrative decision in Australia, when climate impact is involved,” she said.

According to Norton Rose Fulbright partner Noni Shannon (pictured), there are two main differences with Australian policy and law which “cast some uncertainty” about how the Heathrow Airport decision may impact upon infrastructure approvals here.

The first is that although Australia has ratified the Paris Agreement, there is no domestic law incorporating that agreement into Australian law and the Australian federal government has not committed to a 2050 net-zero emissions target. The Court of Appeal found that the UK government had ratified the Paris Agreement and made firm statements reiterating government policy of adherence to the Paris Agreement,” she explained.

“The second is that in Australia most planning and environmental approval decisions are made at the state/territory or local level. The Environment Protection and Biodiversity Conservation Act does not expressly require the consideration of climate change impacts arising from the carrying out of a project. However, the EPBC Act is under review. The terms of reference for that review expressly includes a consideration of ‘Australia’s international environmental responsibilities’ and the accompanying discussion paper identifies climate change (and the physical climate risks of increases in sea and air temperatures, more extreme weather events, sea level rises, ocean acidification, and shifts in rainfall) as a key pressure on Australia’s environment and growing economy.”

Moreover, Ms Shannon added, the Senate recently referred the Environment Protection and Biodiversity Conservation Amendment (Climate Trigger) Bill 2020 to the Senate environment and communications legislation committee for inquiry and report by 14 October 2020. 

“If passed, this bill would introduce a climate change trigger into the EPBC Act so that federal approval would be required for major projects with a large carbon footprint,” she said.

Taking climate change out of the political realm

For Ms Peacock, the “real importance” of the Heathrow decision and last year’s Rocky Hill ruling in NSW is that in those cases “decisions take the issue of climate change outside the grasp of politics”.

“You have a court finding made following an adversarial contest, that the issue of climate change is real and its effects demand proper consideration,” she said.

“A business or government decision-maker reviewing a major project would be remiss not to turn its mind to how climate change and Australia’s obligations could positively or negatively impact on that project.”

Ms Shannon expressed similar sentiments, saying the decision will “shine a spotlight on decision-makers” who are required by statute to consider climate change policies in making planning instruments or determining approvals for major infrastructure projects.

“Those decision-makers may be required to consider any commitments made under international agreements, such as the Paris Agreement, even where those commitments are stricter than the commitments adopted under domestic laws. The scope of such consideration will depend on the drafting of the particular statutory power,” she mused.

“This decision has the potential to have broad implications for the approval and financing of large infrastructure projects globally and in Australia, particularly in the wake of the recent catastrophic bushfires which are causing a climate resilience review of infrastructure and building approvals generally. Business, including financiers and developers, will need to ensure that their due diligence and assessment processes accurately identify the climate risks and impacts associated with any new project in the context of relevant climate policy, to enable decision-makers to undertake meaningful consideration of those issues. This will [help minimise] litigation risk on climate change grounds for major projects and for businesses in relation to corporate governance.”

How law firms and legal departments can respond

Law firms and in-house counsel have an important role to play in helping businesses, Ms Shannon said, regardless of whether they are project developers, investors, banks or insurers, so as to understand the truly systemic nature of climate risk.

“Encouraging compliance with the 2017 recommendations of the Task-force on Climate-related Financial Disclosures (as recommended by ASX guidelines) is a positive step in this direction, as it helps [boards identify] with the ways in which their companies are exposed to the various forms of climate risk and take steps to mitigate or manage those risks,” she suggested.

Ms Peacock, in considering how firms and departments can act, reflected that climate change-based legislation and administrative challenges are becoming “bigger and more frequent”.

The Steggall Bill

“This is a fast-changing area of law. I feel lawyers need to anticipate how that will continue to evolve, so they aren’t just advising clients about the now but also preparing them for the very foreseeable future.”

In addition, if independent MP Zali Stegall’s new private member’s bill – the Climate Change (National Framework for Adaptation and Action) Bill 2020 – is enacted, there will be an additional layer of expectations upon businesses and government decision-makers, Ms Peacock noted.

“If passed, Zali Steggall’s Climate Change Bill would establish a national framework to address climate change, which includes incorporating the long-term aim of the Paris Agreement to achieve net-zero emissions by 2050. This would, arguably, have the effect of requiring the Australian government to comply with the Paris Agreement in all policy decisions,” Ms Shannon said.

“While that will create additional compliance obligations, the bill as proposed will also help provide certainty of expectation and assist businesses in navigating this transition period,” Ms Peacock posited.

“This would be a significant development in climate policy in Australia, which has largely treated climate change as an isolated issue to date and would provide business with greater certainty on Australia’s decarbonisation target,” Ms Shannon concluded.