While the focus is on the Federal Government’s plans for its CPRS and the possible outcomes of the Copenhagen Climate Change Conference, another development has been quietly but steadily increasing in significance: private litigation based on climate change issues.

Climate change litigation is at a fledgling stage in Australia, but developments both in this country and in the United States suggest that such litigation will increase in frequency and significance.

At present, three principal types of action can be envisaged:

  • regulatory actions, where a plaintiff seeks to enforce an interpretation of regulatory provisions which would require action to reduce greenhouse gas emissions
  • tort actions, most obviously in public nuisance, where a plaintiff seeks direct relief against an emitting entity, and
  • shareholder actions, where shareholder plaintiffs seek to compel their own corporation to adopt a better approach to climate change issues, or to be recompensed for loss of share value because of the corporation’s alleged inadequate approach to such issues

Regulatory actions

So far in Australia, climate change litigation has been confined to regulatory actions. The context is usually state and territory land-use planning legislation, or the federal Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), each of which has provisions for substantially open standing. The results have been mixed:

  • In a challenge to approval under the EPBC Act for the development of two coal mines, the Federal Court held that the expression ‘likely impacts’ does not extend to merely theoretical impacts, including the possibility of increased greenhouse gas concentrations due to the downstream emissions from the burning of coal produced at the proposed mines.1
  • Contrariwise, in a challenge to the planning approval for another coal mine, the New South Wales Land and Environment Court held that, in the circumstances of the case, the impact of such emissions did need to be assessed.2
  • Decisions of the New South Wales Court of Appeal and the New South Wales Land and Environment Court have held, apparently inconsistently:
  • that the principles of ecological sustainable development (ESD) are a mandatory consideration under the New South Wales planning laws but that those principles do not require a particular form of quantitative assessment of greenhouse emissions3
  • that the principles of ESD are not yet a mandatory consideration in all such cases, but that it might be expected that they soon will be4, and
  • that the principles of ESD, as a component of the public interest, are a mandatory consideration and extend to the consideration of climate-change induced coastal erosion (but that the respondent Council had considered those impacts).5
  • A number of recent decisions of courts and administrative tribunals have upheld the principle that consent for development or subdivision may be refused in circumstances where there is a reasonable expectation that climate-induced rising sea levels and increased severity of storm events will adversely impact the relevant land within the next century or so.6

It remains to be seen whether these diverse holdings will lead to a settled jurisprudence concerning the necessity of considering, the scope, and the weight to be given to, climate change impacts in the context of planning and environmental approvals.

In the United States, the focus has also been on regulatory actions, but the principal hurdles for would-be plaintiffs have been standing (because the relevant legislation generally does not contain ‘open standing’ provisions) and the constitutional issue of the justiciability of ‘political’ questions. Important recent decisions appear to indicate that at least the states and certain environment organisations may satisfy the ‘standing’ requirements, and that in the absence of concerted Federal measures to address climate change through the ‘political’ branches of government (the legislature and executive), recourse may be had to the judicial system.7

Tort actions

There have been no Australian tort actions related to climate change to date, and such actions face significant hurdles which have less bearing on regulatory actions, namely: standing, causation and the utility of granting the relief sought.

However, recent developments in the United States indicate that some of these hurdles at least may be able to be overcome.

The issue of standing appears able to be addressed by framing an action in public nuisance. An action in public nuisance may be framed where the defendant’s conduct unreasonably endangers the health, property or comfort of the public generally or obstructs the public in the exercise of its rights. Importantly, such an action does not require a plaintiff to establish that the plaintiff’s private right to the use and enjoyment of land has been specially affected by the defendant’s conduct.

Recent decisions of United States courts indicate that the courts will at least entertain such an action, as in a private suit brought against oil and gas companies alleging that their operations causes emissions of greenhouse gases that exacerbated the damage caused to the plaintiffs’ property by Hurricane Katrina,8 or a suit brought by eight states and New York City against electricity producers for climate-related damage caused by their carbon dioxide emissions.9

Each of the decisions mentioned established no more than that the relevant plaintiffs have standing to sue and that the courts have jurisdiction to hear the actions notwithstanding the ‘political’ questions that will be raised.10 The more difficult issue of causation—in particular, the fact that many factors other than the defendant’s actions are contributory to global warming—have yet to be squarely faced.

It seems reasonable to expect that Australian litigants will follow the American example. Their path to the courts is likely to be smoother because of the lack in Australia of some of the constitutional doctrines that impede such actions in the United States.

Shareholder actions

Neither in Australia nor the United States has there yet been a shareholder action based on climate impacts. However, these can surely be expected and will probably not face the issues of standing and justiciability that loom so large in the tort cases.

In Australia, there is already a possible statutory basis for such actions in the requirement for the annual directors’ report for a listed public company to contain information that shareholders would reasonably require to make an informed assessment of the company’s ‘business strategies and its prospects for future financial years’.11

It is not difficult to imagine that, in the near future, increasing concern by investors about a company’s response to climate change will give a specific, climate-related, content to that requirement, and that the failure to fulfil the requirement adequately or at all may found individual or class-based actions.

In the United States, the Securities and Exchange Commission (the Federal corporate regulator) is currently processing a ‘rule-making petition’ filed in September 2007 by a number of State Treasurers, Comptrollers and Attorneys-General (among others), which would expressly require the disclosure of climate-related information in company reports. Again, the wide availability of such information may prove a stimulus to action by shareholders who are dissatisfied with their own company’s performance in this area.

Conclusion

Climate change litigation is in its infancy, both in Australia and elsewhere. However, all indications are that the scope for such litigation is steadily increasing and that at least some of the impediments to it are being steadily worn away. It remains to be seen whether the probable greatest impediment—proof of causation—will give way to a determined and well-resourced litigator. It may be that a continued failure to make progress with the CPRS, or in Copenhagen or both, will encourage the emergence of such a litigator.