Lawyers for Climate Action NZ Inc v Climate Change Commission
[2022] NZHC 3064
•23 November 2022
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV 2021-485-341
[2022] NZHC 3064
UNDER the Judicial Review Procedure Act 2016 and Part 30 of the High Court Rules 2016 IN THE MATTER OF
an application for judicial review
BETWEEN
LAWYERS FOR CLIMATE ACTION NZ INCORPORATED
Applicant
AND
THE CLIMATE CHANGE COMMISSION
First Respondent
MINISTER FOR CLIMATE CHANGE
Second Respondent
Hearing: 28 February 2022 – 4 March 2022 (further submissions received
18, 19 and 22 August 2022)
Counsel:
J S Cooper KC, J D Every-Palmer KC and S T Coupe (via VMR) for Applicant
V E Casey KC, S A H Bishop (via VMR) and H M L Farquhar for First Respondent
A L Martin, P H Higbee (via VMR in part) and H T N Fong (via VMR) for Second Respondent
Judgment:
23 November 2022
JUDGMENT OF MALLON J
Table of contents
Introduction [1]
The parties [12]
The Commission [12]
The Minister [16]
LCANZ [17]
Context, and international and domestic framework [18]
LAWYERS FOR CLIMATE ACTION NZ INCORPORATED v THE CLIMATE CHANGE COMMISSION [2022] NZHC 3064 [23 November 2022]
Context [18]
International instruments [21]
Domestic legislation [37]
Preliminary issues [56]
Court’s jurisdiction to review the Commission’s advice [56]
Deference and intensity of review [69]
Evidence [77]
First ground of review: error of logic [81]
Introduction [81]
NDC Advice [87]
Commission’s reasoning [92]
The Commission’s calculations [100]
The alleged logical error and its impact [107]
Assessment [110]
Second ground of review: misapplication of statutory purpose and criteria [129]
Introduction [129]
The Budgets Advice [133]
The Minister’s decision [139]
Statutory provisions [141]
Statutory interpretation: two purposes? [148]
Statutory interpretation: what does “contribute to” mean? [155]
Statutory interpretation: a “bottom line” purpose? [167]
Did the Commission correctly interpret its task? [172]
Misinterpretation of criteria? [186]
Conclusion [191]
Third ground of review: was MAB accounting permissible? [192]
Introduction [192]
Climate change accounting and trees [196]
The Commission’s advice [199]
The Minister’s decision [216]
Statutory provisions [218]
The issue [229]
The New Zealand Greenhouse Gas Inventory [231]
Legislative history [242]
What is covered by “the rules”? [256]
Henry VIII clause [262]
Conclusion [274]
Fourth ground of review: unreasonable [275]
Introduction [275]
Preliminary issues [282]
What is the NDC in net:net terms using GHGI [284]
What are the budgets in net:net using GHGI [286]
Commission’s justification [291]
Is this consistent with contributing to the global 1.5˚C goal? [306]
Sufficiently ambitious? [308]
Unreasonable not to do more? [311]
Result [314]
Introduction
[1] In response to the climate change emergency, Parliament enacted legislation aimed at enabling Aotearoa New Zealand to develop and implement policies that would contribute to the global effort to limit the global average temperature increase to 1.5˚C above pre-industrial levels and meet its international obligations.1 Among other things, this legislation set greenhouse gas emissions targets for 2050 (the 2050 Target), including that New Zealand’s net emissions of greenhouse gases, other than biogenic methane, would be zero by 2050.2
[2] It also established the Climate Change Commission (the Commission) to provide periodic independent advice to the Government and review the Government’s progress towards its emissions reduction and adaptation goals. This judicial review proceeding, which is brought by a not-for-profit special interest group (LCANZ), challenges the advice that the Commission has for the first time given under this legislation (the Advice).3
[3] One part of the Advice concerned whether an international commitment New Zealand had made in 2016 about the level by which it would reduce its greenhouse gas emissions by 2030 (the 2016 Nationally Determined Contribution also referred to as the 2016 NDC) was consistent with global efforts to limit global warming to 1.5˚C above pre-industrial levels (the global 1.5˚C effort). The Commission advised that the 2016 NDC was not consistent with the global 1.5˚C effort. It also provided advice on the level of commitment that would be compatible with that effort (the NDC Advice).
[4] LCANZ challenges the NDC Advice as based on a logical or mathematical error. This alleged error concerns the way that the Commission compared the level of New Zealand’s international commitment (as set out in the 2016 NDC) with modelling
1 Climate Change Response (Zero Carbon Act) Amendment Act 2019 [the Amendment Act].
2 See [45] for the complete definition of the 2050 Target.
3 He Pou a Rangi | Climate Change Commission Ināiā tonu nei: a low emissions future for Aotearoa
(31 May 2021) [Final Advice].
carried out by the Intergovernmental Panel on Climate Change (IPCC)4 in a 2018 report (the 2018 Special Report).5
[5] That modelling was of different global pathways that would be consistent with limiting warming to within 1.5˚C above pre-industrial levels. These pathways compared net emissions in the target year that would be consistent with the global 1.5˚C effort with net emissions in the base year (a net:net measure) to derive a percentage reduction.6 The Commission applied this modelling to New Zealand’s gross emissions in the base year (a gross:net measure) to derive a percentage reduction by the target year that would be consistent with the 1.5˚C global effort.7 LCANZ says it was an error to use the gross:net measure. It says it meant that the NDC Advice understated the level of reductions necessary to be consistent with the 1.5˚C global effort and was unlawful, irrational and unreasonable.
[6] Another part of the Advice concerned budgets for New Zealand’s emissions of all greenhouse gases for consecutive periods from 2022 onwards that the legislation required the Minister to set (the Budgets Advice).8 These budgets set the quantity of emissions permitted for specific periods, with a view to meeting the domestic 2050 Target and the global 1.5˚C effort.9 LCANZ contends that the Commission made errors in preparing the Budgets Advice.
[7] First, it says the Commission wrongly focussed on budgets that were consistent with the 2050 Target rather than also considering whether they were consistent with
4 The Intergovernmental Panel on Climate Change [IPCC] is the United Nations’ body for assessing the science relating to climate change. Its objective is to provide governments at all levels with scientific information they can use to develop climate change policies. Its reports and guidance are the work of various scientists and teams of authors nominated by member governments from time to time. Its work is recognised as the most authoritative source of evidence on the science of climate change; provides guidance and information; and is policy-relevant, but not policy- prescriptive.
5 IPCC Global Warming of 1.5°C. An IPCC Report on the impacts of global warming of 1.5°C above pre-industrial levels and related greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty (Cambridge University Press, Cambridge, 2018) [2018 Special Report]. Also referred to as SR18 or SR1.5
6 See discussion at [82].
7 See discussion at [83].
8 Climate Change Response Act 2002 (as amended by the Amendment Act) [Climate Change Response Act], s 5X; and Part 1B sub-pts 2 and 3.
9 Section 4 (definition of “emissions budget”); and Part 1B, sub-pt 2, s 5W.
the global 1.5˚C effort. In doing so, it says the Commission’s analysis repeated the logical error that it made in the NDC Advice. It submits that this led to the Commission failing to grapple with the extent of reductions in emissions that are necessary by 2030 to contribute to the global 1.5˚C effort.
[8] Secondly, it says that the Commission wrongly grouped the mandatory statutory considerations and adopted “economically affordable” budgets rather than the statutory requirement to recommend budgets that are “ambitious but likely to be technically and economically achievable” and that would meet the statutory purpose of contributing to the global 1.5˚C effort.10
[9] The next aspect of the Advice that is challenged concerns the accounting methodology it recommended for measuring progress towards meeting the emissions budgets and the 2050 Target. LCANZ contends that the legislation mandated a particular accounting method (Greenhouse Gas Inventory accounting also referred to as GHGI or GHGI net) whereas the Commission recommended a different method (modified activity-based accounting also referred to as MAB). It says the Commission erred in law in recommending MAB. It says the consequence of the error was that it risked portraying a false sense of ambition of the level of emissions reductions in the budgets than the emissions that the atmosphere would actually see during the budget periods.
[10] Lastly, LCANZ contends that the Budgets Advice was irrational, unreasonable and inconsistent with the legislative purpose of contributing to the global 1.5˚C effort. It says the Commission’s recommended budgets will see emissions increasing over the next decade and are inconsistent with reductions the 2018 Special Report says are necessary between 2010 and 2030 for the global 1.5˚C effort. It also says the Budgets Advice was inconsistent with the Commission’s analysis as to the NDC that what would be consistent with the global 1.5˚C effort and New Zealand’s fair share of the global budget as a substantial past emitter and a developed country. Finally, it says that the Commission failed to address the relative costs, benefits and risks of further
10 Section 5ZC(2)(b)(iv).
domestic reductions as compared with the proposed purchase of offshore mitigation to meet New Zealand’s NDC.
[11]For the reasons that follow, I have concluded that:
(a)The Commission did not make a mathematical or logical error in its application of the IPCC modelling. It did not intend to make a direct mathematical comparison. The Commission intended to use the IPCC modelling only as an indirect comparator, incorporating value judgments about New Zealand’s contribution to the global 1.5˚C effort. While the Commission might have set out its approach more clearly, the Minister, to whom the NDC Advice was given, correctly understood the Commission’s approach and that there were other ways to assess New Zealand’s appropriate contribution.
(b)The Commission did not misinterpret the statutory purpose, as it correctly understood that the emissions budgets should be set having regard to the mandatory relevant considerations and with both the 2050 Target and contributing to the global 1.5˚C effort in mind. The Commission also correctly applied the mandatory relevant considerations and did not mischaracterise them.
(c)The Commission did not err in law by recommending MAB as the accounting methodology for measuring progress towards meeting the emission budgets and the 2050 Target. The legislation empowered the Commission to give advice on the appropriate accounting methodology and did not mandate the use of GHGI for this purpose.
(d)The Commission’s Advice was not irrational or unreasonable. The value judgments on which the NDC Advice were based reflected New Zealand’s particular circumstances as a developed country, but with significant commercial forestry with cyclical swings sequestering carbon from the atmosphere and then releasing it. The MAB methodology was intended to provide a clear signal and stable basis on
which to drive climate change action rather than relying on removals of carbon from existing forestry. The Commission’s reasons and material on which it was based supported its choice of MAB. The Budgets Advice reflected the same reasoning and material.
LCANZ was correct that neither the NDC Advice nor the Budgets Advice put New Zealand on track to reduce domestic net emissions by 2030 as per the IPCC global pathways but the legislation did not require this in order to contribute to the global 1.5˚C effort. There were a range of considerations the Commission was required to take into account. Amongst other things, the Commission concluded that there was the risk of severe social and economic impacts on New Zealand communities, people and businesses, with legacy impacts on other generations and Māori, by trying to make a contribution solely through domestic action at this early stage of New Zealand’s transition to a low emissions economy. The Advice would put New Zealand on track to reach the net zero carbon target sooner than the 2050 Target. The Commission’s reasoning and the material on which was based justified its Advice. No error in that reasoning or the material on which it was based has been shown.
The parties
The Commission
[12] The Commission is a specialist and independent body. It is chaired by Dr Roderick Carr. He has extensive experience in public sector governance and broad private sector experience. The Deputy Chair is Lisa Tumahai who has expertise and knowledge in te Tiriti o Waitangi and te Ao Māori. Four of the other commissioners have expertise in climate science, mitigation and adaption. Three of those four have been authors of reports prepared by the IPCC. The remaining commissioner has held professional positions in the agricultural industry. The Commission’s work is supported by an interdisciplinary team with expertise in climate change science and policy, and emissions reporting and accounting.
[13] The Advice runs to 418 pages. It is supplemented by further volumes of supporting evidence.11 Its draft advice (the Draft Advice) was published on 1 February 2021. The Advice (that is, the advice in its final form) was published on 31 May 2021.12 The Commission’s process included extensive discussions and consultation with individuals, community groups, non-governmental organisations, businesses and industry groups, public agencies, local governments and others. It held meetings and online events, receiving more than 15,000 written submissions.
[14]The Commission’s Advice was in three parts:
(a)advice on the first three budgets for the three consecutive periods to 2035 (the Budgets Advice);
(b)direction on the policies and strategies for the emission’s reduction plan; and
(c)advice on the NDC (the NDC Advice) and the eventual reduction in biogenic methane.
[15]Its advice on (a) and (c) is the subject of this judicial review.
The Minister
[16] The Minister has been a Member of Parliament since 2014. He has been the Minister of Climate Change since 2017. He requested the NDC Advice and the Budgets Advice. His receipt and response to the Advice has led to the communication of an amended NDC to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) and the publication of emissions budgets, as further discussed later in this judgment.13
11 He Pou a Rangi | Climate Change Commission 2021 Supporting Evidence Consultation Feedback and Evidence (2021) [Supporting Evidence].
12 Final Advice, above n 3.
13 See discussion from [87] and from [133].
LCANZ
[17] LCANZ is a non-profit group of over 350 lawyers who advocate for legislation and policies to ensure New Zealand meets its commitments under the Paris Agreement in the public interest. It considers the Budgets recommended by the Commission and the NDC Advice lack ambition commensurate with the urgent action required to limit global warming to 1.5˚C.
Context, and international and domestic framework
Context
[18] It is unequivocal that human influence has warmed the atmosphere and the land. Widespread and rapid changes in the atmosphere, ocean and biosphere have occurred. Global warming of 1.5˚C and 2˚C will be exceeded during the 21st century unless deep reductions in CO2 and other greenhouse gas emissions occur in the coming decades.14
[19] The global harm is significantly greater if average temperatures increase by 2˚C or higher than if temperature increases are kept to 1.5˚C.15 Such harm includes many more millions of people exposed to extreme and exceptional heatwaves, more severe impacts on biodiversity, sea level rise and greater impacts on food security, water supply, human security and economic growth.16 The group of small island developing states, which includes the New Zealand dependency of Tokelau and our associated states of Niue and the Cook Islands, are particularly vulnerable to cyclones, storms and sea level rise. These will increase as global warming increases, and will be significantly worse at 2˚C than 1.5˚C.17
[20] On 2 December 2020, Parliament passed a motion declaring a climate emergency. Among other things, Parliament referred to the findings of the 2018
14 IPCC Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press, Cambridge, 2022) [IPCC Sixth Assessment Report (AR6)]; referred to in affidavit of Professor Ralph Sims at [11].
15 Accepted by the parties in the pleadings.
16 Amended statement of claim at 12; and affidavit of Professor Sims at [13].
17 Affidavit of Professor Sims at [39].
Special Report, noted that global emissions needed to fall by around 45 per cent from 2010 levels by 2030 and reach net zero by around 2050 to avoid more than a 1.5˚C rise in global warming, and that New Zealand has committed to taking urgent action on greenhouse gas mitigation and climate change adaptation.
International instruments
a)UNFCCC
[21] The United Nations Framework Convention on Climate Change (UNFCCC) is the foundation global treaty concerning climate change.18 Article 2 provides that the ultimate objective of the UNFCCC is as follows:
The ultimate objective of this Convention and any related legal instruments that the Conference of the Parties may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.
[22] The UNFCCC does not impose specific emissions reduction targets on the parties. The responsibilities imposed on states under the UNFCCC depend on whether the state is a developed country, a developed country with specific financial responsibilities, or a developing country.
[23] Article 3 sets out principles that guide the parties’ actions to achieve this objective. These include the principle that developed countries (referred to as Annex I countries), which include New Zealand, should protect the climate system “on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities” and to take “the lead” in combating climate change.19 They also include that a state’s policies and measures should be comprehensive, cover
18 United Nations Framework Convention on Climate Change 2203 UNTS 162 (opened for signature 16 March 1998, entered into force 16 February 2005) [UNFCCC]. As at 2020, 197 states had become parties to the UNFCCC. It was signed by New Zealand on 4 June 1992 and ratified on 16 September 1993.
19 Article 3(1)(a) and Annex 1.
all relevant sources, sinks and reservoirs of greenhouse gases and adaption, and comprise all economic sectors.20
[24] Article 4 sets out the commitments made by the parties. These include that developed countries (which include New Zealand) are to adopt national policies and measures on mitigating climate change that demonstrate they are “taking the lead” and taking into account their differences in “starting points and approaches, economic structures and resource bases, the need to maintain strong and sustainable growth, available technologies and other individual circumstances.21 They are to periodically report on their policies and measures.22
[25] The UNFCCC establishes the Conference of the Parties.23 The Conference of the Parties keeps the implementation of the UNFCCC under regular review. This includes:
(a)promoting and guiding the development and refinement of methodologies for preparing inventories of greenhouse gas emissions by sources and removals by sinks; and
(b)evaluating the effectiveness of measures to limit the emissions and enhance the removals of these gases.24
[26] New Zealand, as an Annex 1 country, must keep an inventory and periodically provide its national inventory report in accordance with these methodologies.25 The national inventory reports attempt to cover all emissions and removals from all land- use categories regardless of what causes them. For this reason, they are often described as reflecting “what the atmosphere sees”.26
20 Article 3(3).
21 Article 4(2)(a) and Annex 1.
22 Article 4(2)(b).
23 Article 7(1).
24 Article 7(2)(d).
25 The Climate Change Response Act refers to this as the Greenhouse Gas Inventory. LCANZ refers to the accounting for national inventory reports as GHGI accounting or GHGI net. This is discussed in more detail later.
26 They are not fully comprehensive. Better methods of estimating emissions have become available, some estimates for some categories can be highly uncertain, states have some discretion about what part of their emissions they report on and there are some natural sources of emissions (such as volcanoes) that are not included in these reports.
b)Kyoto Protocol
[27] The Kyoto Protocol to the UNFCCC, which came into force in 2005, was intended to strengthen the commitments of developed countries to reducing greenhouse gases.27 Under this protocol, for the first time countries agreed to take on individual binding emissions reductions targets and associated emissions target accounting obligations. Annex 1 countries, including New Zealand, were to reduce emissions by specific percentages compared to 1990 levels over the five-year period from 2008 to 2012 (referred to as the first commitment period).28
[28] With binding targets came prescriptive accounting rules that the Parties agreed would govern how their individual targets were set and how progress against them would be measured.29 These accounting rules are referred to as target accounting or Kyoto accounting rules. The rules countries were required to apply depended on whether a country’s land use, land-use change and forestry activities (LULUCF), in effect their forestry activities, were a net source of emissions in 1990 (the base year for Kyoto accounting).
[29] Countries for whom forestry was a net source of emissions in 1990 had to include those emissions in calculating their base year emissions. Progress against their target reduction in emissions for the commitment period was measured against this. This is referred to as net:net accounting as both the base and target year calculate all emissions, less any removals.
[30] Countries for whom forestry was a net sink of emissions in 1990 did not count these removals in calculating their base year emissions. Progress against their target reduction in emissions for the commitment period (which counted net emissions, that
27 Kyoto Protocol to the United Nations Framework Convention on Climate Change 2303 UNTS 162 (opened for signature 16 March 1998, entered into force 16 February 2003) [Kyoto Protocol]. The Kyoto Protocol was ratified by 192 of the parties to the UNFCCC. New Zealand signed the Kyoto Protocol in 1998 and ratified it in 2002.
28 Article 3(1). In December 2012, some of the parties to the Kyoto Protocol (who made up less than 11 per cent of global emissions) adopted the Doha Amendment. This added a second commitment period, being 2013 to 2020, to reduce emissions 18 per cent below 1990 levels by 2020. While New Zealand did not adopt the Doha Amendment, it did adopt an emissions reduction target for this period under the UNFCC.
29 Articles 5 (requiring a GHGI), 7 (requiring submission of the GHGI) and 8 (requiring reviews of reports).
is all emissions less any removals) was measured against this gross base year calculation. This is referred to as gross:net accounting.
[31] The reason for the difference was to avoid rewarding or penalising countries for their past actions. Countries such as New Zealand, that had planted a lot of commercial forests prior to 1990, would have to continually plant more forests just to maintain the same level of emissions compared to the base year, if removals from the pre-1990 planted forests were counted in the base year. A gross:net approach was considered appropriate for such countries. In contrast, countries such as Australia with substantial deforestation emissions in 1990, received the credit of declining emissions when deforestation subsequently reduced under a net:net approach.
[32] The Kyoto Protocol did not require developing countries to set binding targets despite being major emitters of greenhouse gases. Not all developed countries chose to participate in the Kyoto Protocol framework. Because it prioritised the imposition of stringent and binding targets over ensuring collective participation and action in response to climate change, the protocol gradually attracted less political support.
c)Paris Agreement
[33] The Paris Agreement is a global agreement that came into force on 4 November 2016.30 It aims to “strengthen the global response to the threat of climate change”31 by:32
Holding the increase in the global average temperature to well below 2˚C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5˚C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change …
[34] Unlike the Kyoto Protocol, the Paris Agreement does not set binding targets for individual countries. Instead, countries communicate a Nationally Determined Contribution (NDC) to the global response to climate change.33 These are to be
30 Paris Agreement (opened for signature 22 April 2016, entered into force 4 November 2016) [Paris Agreement]. It was adopted by 196 parties to the UNFCCC. New Zealand signed and ratified the Paris Agreement in 2016.
31 Article 2(1).
32 Article 2(1)(a).
33 Articles 3 and Article 4(2).
“ambitious” and parties are to “aim to reach global peaking of greenhouse emissions as soon as possible” and “to undertake rapid reductions thereafter”.34 The NDCs are to be communicated every five years.35 Each successive NDC is to be a progression and reflect its “highest possible ambition … in the light of different national circumstances”.36
[35] Developed countries, such as New Zealand, are to continue “taking the lead by undertaking economy-wide absolute emission reduction targets”.37 A country may adjust its existing NDC with a view to enhancing its level of ambition.38 Countries may pursue cooperative measures (that is, transferring climate mitigation from one country to another) to allow for higher ambition.39
[36] In contrast with the Kyoto Protocol, the Paris Agreement does not prescribe any particular accounting method that NDCs must adhere to. It does contain a set of reporting requirements that aim to promote transparency around countries’ emissions and their actions to achieve their NDCs. This includes each party regularly providing its national inventory report of emissions by sources and removals by sinks of greenhouse gases prepared using “good practice methodologies” accepted by the IPCC and agreed upon by the Conference of the Parties.40
Domestic legislation
[37] The Climate Change Response Act 2002 (the Climate Change Response Act) was introduced with the original purpose of enabling New Zealand to meet its international reporting obligations under the UNFCCC and the Kyoto Protocol by establishing a national inventory agency to record and report greenhouse gas emissions. In 2008, New Zealand introduced the NZ Emissions Trading Scheme (ETS), its first substantive climate action policy.
34 Articles 3 and 4(1).
35 Article 4(9).
36 Article 4(3).
37 Article 4(4).
38 Article 4(11).
39 Article 6(1). Article 6(2) provides hat parties are to use “robust accounting” to ensure there is not double counting amongst other things. Rules for implementing art 6, including reporting requirements, have now been agreed at Glasgow COP 26.
40 Article 13(7).
[38] The Climate Change Response (Zero Carbon Act) Amendment Act 2019 (the Amendment Act) was passed in November 2019 with cross-party support. The regulatory impact statement for the Bill introducing the Act said that it reflected a strong shift in the world’s understanding of and commitment to the necessary global climate change response. It also said that modelling indicates the Bill’s economic impacts will be a significant challenge compared with the “do-nothing” baseline and status quo.
[39] The Amendment Act amended the purpose of the Climate Change Response Act by adding a new purpose that specifically referred to contributing to the global 1.5˚C effort.41 It also: set the 2050 Target;42 introduced requirements to set budgets for domestic emissions of all greenhouse gases across each budget period (the Budgets);43 and established the Commission to provide advice to the Minister and to monitor and report on progress towards meeting the Budgets and 2050 Target.44
a)Purpose
[40]The purpose of the Climate Change Response Act is now as follows:45
3 Purpose
(1)The purpose of this Act is to—
(aa)provide a framework by which New Zealand can develop and implement clear and stable climate change policies that—
(i)contribute to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5˚ Celsius above pre-industrial levels; and
(ii)allow New Zealand to prepare for, and adapt to, the effects of climate change:
(a)enable New Zealand to meet its international obligations under the Convention, the Protocol, and the Paris Agreement, including (but not limited to)—
41 Amendment Act, s 4, inserting s 3(1)(aa).
42 Section 8, inserting s 5Q. This is set out at [45].
43 Section 8, inserting s 5X; and Part 1B, sub-pts 2 and 3.
44 Section 8, inserting Part 1A; and Part 1B, sub-pt 3, s 5ZJ. This includes monitoring and reporting on progress towards the biomethane targets.
45 Climate Change Response Act, s 3.
(i)its obligation under Article 3.1 of the Protocol to retire Kyoto units equal to the number of tonnes of carbon dioxide equivalent of human-induced greenhouse gases emitted from the sources listed in Annex A of the Protocol in New Zealand in the first commitment period starting on 1 January 2008 and ending on 31 December 2012; and
(ii)its obligation to report to the Conference of the Parties via the Secretariat under Article 12 of the Convention, Article 7 of the Protocol, and Article 13 of the Paris Agreement:
(b)provide for the implementation, operation, and administration of a greenhouse gas emissions trading scheme in New Zealand that supports and encourages global efforts to reduce the emission of greenhouse gases by—
(i)assisting New Zealand to meet its international obligations under the Convention, the Protocol, and the Paris Agreement; and
(ii)assisting New Zealand to meet its 2050 target and emissions budgets:
(c)provide for the imposition, operation, and administration of a levy on specified synthetic greenhouse gases contained in motor vehicles and also another levy on other goods to support and encourage global efforts to reduce the emission of those gases by—
(i)assisting New Zealand to meet its international obligations under the Convention, the Protocol, and the Paris Agreement; and
(ii)assisting New Zealand to meet its 2050 target and emissions budgets.
(2)A person who exercises a power or discretion, or carries out a duty, under this Act must exercise that power or discretion, or carry out that duty, in a manner that is consistent with the purpose of this Act.
b)The Commission
[41] Part 1A of the Climate Change Response Act, as introduced by the Amendment Act, established the Commission.46 Its purposes are:47
(a)to provide independent, expert advice to the Government on mitigating climate change (including through reducing emissions of greenhouse gases) and adapting to the effects of climate change; and
46 Section 5A.
47 Section 5B.
(b)to monitor and review the Government’s progress towards its emissions reduction and adaptation goals.
[42]The Commission’s functions include:48
…
(b)to provide advice to the Minister to enable the preparation of emissions budgets (see section 5ZA):
(c)to recommend any necessary amendments to emissions budgets (see section 5ZE):
…
(f)to monitor and report on progress towards meeting emissions budgets and the 2050 target (see sections 5ZJ to 5ZL):
…
(i) to provide other reports requested by the Minister (see section 5K).
[43] Section 5K provides that the Minister may at any time request that the Commission prepare reports for the Minister on matters relating to reducing emissions and adapting to climate change effects. The Commission’s advice on New Zealand’s NDC was requested under this provision. When such a request is made, terms of reference are settled with the Commission and are made publicly available.49 The advice or a report from the Commission to the Minister is presented to the House of Representatives and made publicly available.50
[44] The Commission is required to act independently.51 There are a list of matters that the Commission must consider when carrying out its functions and duties.52 They include, for example, considering current available scientific knowledge; likely economic effects, the distribution of benefits, costs and risks between generations; and responses to climate change taken or planned by parties to the Paris Agreement.53 The Commission is to provide for public participation where necessary, and is to make draft reports publicly available and invite public submissions.54
48 Section 5J.
49 Section 5K(2) and (3).
50 Section 5L.
51 Section 5O.
52 Section 5M.
53 Section 5M(a), (c), (e) and (g).
54 Section 5N.
c)The 2050 Target
[45]Part 1B of the Climate Change Response Act concerns emission reduction.
Subpart 1 concerns the 2050 Target, requiring that:55
(a)net accounting emissions of greenhouse gases in a calendar year, other than biogenic methane, are zero by the calendar year beginning on 1 January 2050 and for each subsequent calendar year; and
(b)emissions of biogenic methane in a calendar year—
(i)are 10% less than 2017 emissions by the calendar year beginning on 1 January 2030; and
(ii)are 24% to 47% less than 2017 emissions by the calendar year beginning on 1 January 2050 and for each subsequent calendar year.
[46] The Commission must review the 2050 Target when preparing budget advice for a budget period on or after 2036 and any other time the Minister requests a review.56 On such a review, the Commission may recommend a change to the time frame for achieving the 2050 Target; the levels of emission reductions required; the gases, emissions and removals to which the 2050 Target applies; and how the 2050 Target may be met (including limits on removals and offshore mitigation).57 The Minister must respond to any such recommendation.58
d)Budgets
[47] Subpart 2 of Part 1B concerns the setting of emissions budgets. It has its own purpose which is as follows:
5W Purpose of this subpart
The purpose of this subpart and subparts 3 and 4 is to require the Minister to set a series of emissions budgets—
(a)with a view to meeting the 2050 target and contributing to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5˚ Celsius above pre-industrial levels; and
55 Section 5Q.
56 Section 5S(1).
57 Section 5T. It may recommend a change only if a significant change has or is likely to occur that relates to specific climate change matters, for example a change in global action, scientific understanding, or New Zealand’s economic or fiscal circumstances or its obligations under relevant international obligations.
58 Section 5U.
(b)in a way that allows those budgets to be met domestically; and
(c)that provides greater predictability for all those affected, including households, businesses, and investors, by giving advance information on the emissions reductions and removals that will be required.
[48] The Minister must set emissions budgets across stipulated emission periods by specified dates.59 For present purposes the relevant periods are 2022–2025, 2026– 2030, and 2031–2035, which were required to be set and notified in the Gazette by 31 May 2022. An emission budget must state the total emissions for all greenhouse gases that will be permitted for the relevant period, expressed as “net quantity of carbon dioxide equivalent.”60 Emissions budgets must be met as far as possible through domestic emissions reductions and removals but offshore mitigation may be used if there has been a change of circumstance affecting the basis of the budget or the ability to meet it domestically.61
[49] Subpart 3 of Part 1B concerns the Commission’s role in advising on emissions budgets. Section 5ZA sets out the matters on which the Commission must advise the Minister relevant to setting an emissions budget. They include the recommended quantity of emissions that will be permitted in each budget period and the rules for measuring progress towards the budgets and the 2050 Target.62
[50] The Commission is required to make its proposed advice publicly available and allow adequate time and opportunity for any submissions to be received, heard and considered.63
[51] The Minister is required to respond to the advice from the Commission and that response is to include a proposed emissions budget for the relevant period.64 If the proposed emissions budget departs from the advice of the Commission, the
59 Section 5X.
60 Section 5Y.
61 Section 5Z.
62 Section 5ZA(1)(a) and (b).
63 Section 5ZA(3). Section 5ZB(2) requires that the Minister also be satisfied that there has been adequate consultation.
64 Section 5ZB(3).
Minister must explain the reasons for any departures in his response to the advice.65 He must also consider whether it is necessary to carry out further consultation.66
[52] The Commission in preparing its advice on emissions budgets, and the Minister in setting the budgets, must have regard to the matters set out in s 5ZC.67 They are required to have “particular regard” to how the emission budget and 2050 Target may realistically be met including “the key opportunities for emissions reductions and removals in New Zealand”.68 They are also to have “regard” to a range of matters including:69
…
(iv)the need for emissions budgets that are ambitious but likely to be technically and economically achievable:
…
(x)responses to climate change taken or planned by parties to the Paris Agreement or to the Convention:
(xi)New Zealand’s relevant obligations under international agreements.
[53] For each emissions budget period the Minister must prepare and make publicly available a plan setting out the policies and strategies for meeting the relevant emissions budget.70 Section 5ZH requires the Commission to provide the Minister with advice on the direction of the policy required in the emissions reduction plan.71 The matters the Commission is required to have regard to in providing advice on the emission budgets also apply to advice on the emissions reduction plans.72
[54] The Minister is required to notify the emissions budgets and the emissions reduction plans in the Gazette, present it to the House of Representatives and make it publicly available.73 Before he does so, for the emissions budgets he must consult
65 Section 5ZB(4)(b).
66 Section 5ZB(4)(a).
67 Section 5ZA(2).
68 Section 5ZC(2)(a)(i).
69 Section 5ZC(2)(b).
70 Section 5ZG(1)(a).
71 Section 5ZH.
72 Section 5ZH(3).
73 Section 5ZD(2) and 5ZI(2).
with the appropriate representative of each of the political parties represented in the House.74
e)Monitoring
[55] Subpart 4 of Part 1B is concerned with monitoring. It requires the Commission to “regularly monitor and report on progress towards meeting an emissions budget and the 2050 target” in accordance with rules set out in s 5ZA(1)(b).75 There is an annual monitoring process and an end of budget period process.76
Preliminary issues
Court’s jurisdiction to review the Commission’s advice
[56] The Commission submits that the Advice is not reviewable, meaning that the Court does not have jurisdiction to do so. It says that the Advice is not the exercise of a “statutory power” within s 5 of the Judicial Review Procedure Act 2016 (the JRP Act) and nor is there a common law right of review. It says the content of the Advice has no effect on anything unless and until it is reflected in a decision made by the Minister. It would then be that Minister’s decision that was reviewable.
[57] The Minister does not take this point. His submissions note that the Advice is the first in a long line of advice the Commission will prepare for the Government. He accepts that “of course the Court has a supervisory role through the judicial review jurisdiction” but notes the limitations of that jurisdiction given that the issues are poly- centric, involve the weighing of competing interests, and the advice is by a specialist body acting within its sphere of expertise.
[58] LCANZ says this judicial review concerns whether the Commission, as a public body, has met its obligations under the Climate Change Response Act. It says the Advice has a significant influence on the Minister’s decision and there is a strong public interest in decision-making on climate change being subject to review.
74 Section 5ZD(1).
75 Section 5ZJ(1). The rules are part of the advice to the Minister on setting an emissions budget (s 5ZA(1)(b).
76 This is discussed in more detail under the second and third grounds of review.
[59] The JRP Act sets out the procedural provisions for the judicial review of the “exercise of a statutory power”.77 Section 5(1) defines “statutory power” as:
a power or right to do anything that is specified in subsection (2) and that is conferred by or under … any Act.
[60] The things specified in s 5(2) include “to exercise a statutory power of decision”78 and “to make any investigation or inquiry into the rights, powers, privileges, immunities, duties, or liabilities of any person”.79 A “statutory power of decision” is in turn defined as:80
… a power or right conferred by or under an Act … to make a decision deciding or prescribing or affecting … the rights, powers, privileges, immunities, duties, or liabilities of any person …
[61] The Commission contends that its Advice is not a “statutory power” of the kind specified in s 5(2). It submits that it exercises a quintessentially policy function, and the mere fact it does so through a body established by statute should not turn that policy function into something that is subject to the supervisory jurisdiction of the Court. It says it was established by statute to reflect its important, independent expert advisory function. Although its advice is provided under a statutory framework, it says that its advice is analogous to the advice that officials provide a Minister. It says the authorities are clear that such advice is not reviewable.
[62] There is a line of case law holding that mere expressions of opinion or the giving of advice are outside the ambit of the JRP Act. However, other case law suggests this distinction is breaking down and that the important point is whether the opinion or advice has important legal consequences.81 The Court’s judicial review jurisdiction is intended to be a broad one. As it was recently put in Mercury NZ Limited v Waitangi Tribunal:82
[19] … The judicial review jurisdiction of the Court is fundamental. … It should not be restricted on the basis of a technical reading of that legislation
77 Judicial Review Procedure Act 2016, s 3.
78 Section 5(2)(b).
79 Section 5(2)(e).
80 Section 4 (definition of “statutory power of decision”).
81 See the discussion at Jason Bull (ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at JR5.01(i).
82 Mercury NZ Ltd v Waitangi Tribunal [2021] NZHC 654, [2021] 2 NZLR 142.
to cover only certain kinds of decisions. It is for the Court itself to control the scope of the jurisdiction.
[20] The Court does so by exercising its discretion. At its heart judicial review is a discretionary remedy. There may well be good reason not to consider the potential grant of the remedy when there are further steps to be taken in relation to a proposed decision, such that it is in the interests of justice to await finalisation before a challenge is considered. …
[63] The breadth of the jurisdiction was earlier discussed in Wilson v White as follows:83
[21] … The principle is that the Courts, in considering the amenability of administrative action to judicial review, are less concerned with the source of the power exercised by decision-makers (and in particular whether or not it was statutory) and now more ready than in the past to treat as reviewable the exercise of any power having public consequences. This is so even if the power is exercised by a private organisation. In all such cases the power must be exercised on public law principles. (Electoral Commission at 433; Phipps at 11).
[22] If the power in question comes within the broad definition of a statutory power under s 3 of the Judicature Amendment Act 1972 the procedure for review will be the statutory one. The wide reach of this provision since enactment of the 1977 amendment to the 1972 Act is not always recognised. It was emphasised by the judgment of Cooke and Jeffries JJ in Webster v Auckland Harbour Board [1983] NZLR 641 at 651:
‘… Parliament underlined that the modern and flexible procedural provisions of the Act are intended to have a liberal scope. If the applicants are able to show that in making any decision under attack the Board violated the express or implied requirements of some statute (which requirements could include, for instance, relevant considerations or fairness) it is highly probable that they will also be able to show that the decision decided, prescribed or affected their rights or privileges. And if their case did reach that point, we think that it would be contrary to the intent of the Judicature Amendment Act to hold that it was not sufficiently a decision under a power conferred by any Act to enable the review procedure to be used.’
The Privy Council also attributed a broad meaning to ‘statutory power of decision’ in Mercury Energy Ltd v Electricity Corporation of New Zealand [1994] 2 NZLR 385, 388.
[64] I do not accept that the Commission’s function is analogous to that of official advice.84 The Commission has been set up to be independent from the Minister. It is
83 Wilson v White [2005] 1 NZLR 189, (2004) 17 PRNZ 270 (CA). See also Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056 at [1].
84 In Milroy v Attorney General [2005] NZAR 362 (CA) at [11]–[12], the Court of Appeal held that judicial review was not available to consider the accuracy and completeness of the advice of officials in the course of the formulation of government policy when no rights were affected by it.
required by statute to take into account specified considerations, to make its draft advice available to invite submissions on draft advice, and its advice is presented to the House and made publicly available. The Minister is required by statute to respond to the Commission’s advice and, if departing from it, explain his reasons for doing so.85
[65] The Commission’s advice is therefore public and has public consequences separate from the consequences of the Minister’s ultimate decision. It is more similar to NIWA’s publication of national climate data which was held to be reviewable in New Zealand Climate Science Education Trust v National Institute of Water and Atmospheric Research Ltd.86 The Commission submits this was wrongly decided and contrary to the Supreme Court decision in Ririnui v Landcorp Farming Limited.87 I do not agree. Both decisions are consistent with the modern approach that treats as reviewable the exercise of any public power having public consequences.88
[66] The Commission’s advice also has parallels with preliminary decisions which are reviewable, subject to the Court’s discretionary assessment as to whether it is appropriate to intervene. The Court of Appeal in Singh v Chief Executive of the Ministry of Business, Innovation and Employment explained this as follows:89
[38] In summary, without limiting the matters which may guide a court in cases such as this, the following considerations will be relevant:
(a)The nature of the statutory power being exercised.
(b)The stage that has been reached in the relevant statutory process.
(c)The extent to which the statutory power exercised is likely to be influential in the ultimate decision.
85 Refer to the discussion under the heading “Domestic legislation” as to the requirements on the Minister on receiving the Commission’s advice.
86 New Zealand Climate Science Education Trust v National Institute of Water and Atmospheric Research [2012] NZHC 2297, [2013] 1 NZLR 75 at [27].
87 Ririnui v Landcorp Farming Ltd, above n 83, at [89] and [91]. The Commission also relied on Ngāti Whatua Orakei Trust v Attorney-General [2018] NZSC 84, [2019] 1 NZLR 116 but the discussion at [36]–[40] in that case is about the principle of non-interference with parliamentary proceedings and the Court reinstated the claim for declaratory relief.
88 Wilson v White, above n 83, at [21].
89 Singh v Chief Executive of the Ministry of Business, Innovation and Employment [2014] NZCA 220, [2014] 3 NZLR 23, applied in Mercury NZ Ltd v Waitangi Tribunal, above n 82, at [20]–[31].
(d)Whether there are any further opportunities in the statutory process to correct any apparent error including the availability of a right to appeal or seek judicial review of a decision ultimately reached at the conclusion of the statutory process.
[39] Where matters have reached only a preliminary stage and the powers exercised to that point are unlikely to be influential in the final decision, the Court will not usually intervene by way of judicial review. There are sound policy reasons why that should be so. Where an investigation is merely at the information gathering stage, and the party under investigation has adequate opportunity to address issues raised for his or her response, it is most unlikely that the subject’s rights will be adversely affected. Moreover, where there are adequate opportunities for appeal or review of any decision ultimately reached, it is not in the public interest that those responsible for conducting preliminary investigations should be put to the time and trouble of responding to applications for review. Similarly, the courts should not generally be troubled with judicial review applications in such circumstances.
[40] That said, we accept there may be cases where the Court’s intervention by way of judicial review may be justified. Cases of this type are likely to be exceptional but where it is demonstrated that an error of law or process has occurred which is likely to have a material influence on the final decision, the Court may be prepared to intervene. The cases we have discussed are illustrative of situations falling into this category.
[67] The nature of the Commission’s powers and the extent to which its Advice is likely to be influential in the ultimate decision are factors that point in favour of it being appropriate to intervene here. Although there was an opportunity for further input and advice from others before the Minister made his decision on the NDC Advice and emission budgets, and LCANZ informed the Minister of its view of the alleged logical error on which the NDC Advice was based, the Commission’s Advice remains a key input into budgets and NDC decisions. The Minister’s starting point is whether to accept the Advice and, if he does not, to say why he does not. Here, as is discussed further below, the Advice led to an increased NDC and was accepted with only minor adjustments in relation to the emissions budgets. Given that starting point, it is likely that, if the Advice had been different, the updated NDC and the budgets would have been different.
[68] I conclude that the Commission’s Advice is the exercise of a reviewable statutory power. The likely influence the Advice will have in decisions made by the Minister, which are of great importance to New Zealanders, makes it appropriate for the Court to intervene if the Commission has not exercised that power in accordance with the Climate Change Response Act. That the Minister’s decision could also or
instead be the subject of a judicial review, because it has been influenced by an error made by the Commission, does not preclude judicial review. However, it may be relevant to the issue of relief.
Deference and intensity of review
[69] As discussed in Thompson v Minister of Climate Change, decisions on climate change are justiciable but may require the Court to defer to the decision maker (in that case, the Minister) on constitutional and institutional grounds depending on the ground of review.90 For example, where a ground of review requires the Court to weigh public policies that are more appropriately and better able to be weighed by those elected by the community, and there is no single right answer to how those polices should be weighed, the Court is not to substitute its view as to the outcome that best meets the statutory purpose.91
[70] The first three grounds of review are not of this kind. They allege a demonstrable logical error in the NDC Advice, a misapplication of the statutory purpose and criteria in the Budgets Advice, and a misinterpretation of statutory provisions relating to how progress against the emissions budgets and the 2050 Target are to be measured. To the extent LCANZ seeks to demonstrate the consequences of these alleged errors, I have considered this under the fourth ground of review. That ground alleges irrationality, unreasonableness and that the advice is inconsistent with the purpose of the Climate Change Response Act. This requires care about Court’s proper role in, and ability to, weigh the poly-centric issues.
[71] It does not, however, follow that this means the standard of review is simply the traditional Wednesbury unreasonableness.92 That involves intervening only if the decision that was made was one that no reasonable decision maker, applying their mind to the question to be decided, could have arrived at it.93 It equates with
90 Thomson v Minister of Climate Change Issues [2017] NZHC 733, [2018] 2 NZLR 160 at [134].
91 See for example Wellington City Council v Woolworths NZ Ltd No 2 [1996] 2 NZLR 537, [1996] NZAR 348 (CA) at 546; and Thomson v Minister for Climate Change Issues, above n 90, at [134].
92 Associated Provincial Picture Houses v Wednesbury Corporation [1947] All ER 680, [1948] KB 223.
93 At 230.
senselessness or irrationality.94 It is a test that incorporates deference to the decision maker but it was formulated in a different era of judicial review when, for example, reasons were rarely required of the decision maker.95 Subsequently, New Zealand courts have accepted that the standard of unreasonableness (and degree of deference required) depends on the context.96 That variability in standard is referred to as variability in the intensity of review applied.97
[72] One of the contexts where New Zealand courts have been prepared to depart from Wednesbury unreasonableness is judicial review of decisions involving fundamental human rights.98 The main debate has been around whether: the test in such a case should be one of unreasonableness, proportionality, or ensuring the decision maker has adequately justified the decision made; and the extent to which it should extend beyond decisions involving fundamental human rights.99
[73] A relatively recent example of this approach in a case involving fundamental human rights is Kim v Attorney-General.100 In that case, this Court considered the appropriate approach was to consider whether the challenged decisions were reached on sufficient evidence, were fully justified and were decisions open to a reasonable decision maker.101 This approach was considered appropriate by the Court of Appeal on appeal.102 While the Supreme Court did not endorse the approach on appeal, nor did it overrule it.103
94 Philip A Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters, Wellington, 2021) at [24.3].
95 Michael Taggart “Proportionality, Deference, Wednesbury” [2008] NZLR 423 at 428–429.
96 At 442.
97 Paul Craig “Varying Intensity of Judicial Review: A Conceptual Analysis” (Public Law, July 2022) (forthcoming) at 8–10. Compare with Students for Climate Solutions Inc v Minister of Energy and Resources [2022] NZHC 2116 at [40]–[47].
98 See the cases referred to in Dean Knight “A Murky Methodology: Standards of Review in Administrative Law” (2008) 6 NZJPIL 117; Philip A Joseph Constitutional and Administrative Law in New Zealand (2nd ed, Thomson Brookers, Wellington, 2001) at 834–839; (3rd ed, Thomson Brookers, Wellington, 2007) at [21.11]; (5th ed, Thomson Reuters, Wellington, 2021) at [22.8.4]; and Taggart, above n 95, at 446, n 119. See also Harry Woolf and others (eds) De Smith’s Judicial Review (8th ed, Sweet & Maxwell, United Kingdom, 2018) at [11-140]–[11-141].
99 Joseph, above n 94, at [22.8.4] and [22.8.5]; Taggart, above n 95, at 446–454 and 461–463; Craig, above n 97; and De Smith’s Judicial Review, above n 98, at [11-136]–[11-145].
100 Kim v Attorney General [2017] NZHC 2109.
101 At [13] and [15].
102 Kim v Attorney-General [2019] NZCA 209 at [45]–[47].
103 Kim v Attorney-General [2021] NZSC 57 at [50]–[51].
[74] Unless and until the Supreme Court says otherwise, the current position is that the intensity of review varies with the context. The present context concerns decisions that chart the course of New Zealand’s climate change response to what Parliament accepts is a climate emergency and which requires global effort to reduce the harm to the planet and its inhabitants. The significance of climate change decisions has led some courts to find that they engage the right to life.104 While a recent decision of this Court has found that the right to life under s 8 of the New Zealand Bill of Rights Act 1990 is not engaged in the climate change context,105 it is beyond dispute that the decisions that will affect New Zealand’s emissions pathway over this and the coming decade are of significant importance.106
[75] In the modern context of “increasing expectations of fairness, rationality and justification in public affairs”107 and the particular context here, I consider a more exacting standard than Wednesbury unreasonableness is appropriate.108 While deference is also appropriate (on constitutional grounds) and necessary (for practical reasons of institutional context) given its poly-centric nature, the Court should not relinquish its role “to probe” the reasoning.109
[76] In accordance with the approach in Kim, the more exacting standard involves examining whether the challenged decisions have been reached on sufficient evidence, have been fully justified and whether decisions were open to a reasonable decision maker in light of the legislative purpose while recognising that reasonable decisions makers could reach different decisions.110 In assessing this, the court must proceed
104 The State of the Netherlands v Stichting Urgenda ECLI:EU:HR:2019:2007; and Neubauer v Germany FCC BVR 2656/18/1, BVR 78/20/1, BVR 96/20/1, BVR 288/2021, 24 March 2021. At the time of the hearing, other cases were before the Court: Duarte Agostinho and Others v Portugal and Others (communicated case) ECHR 39371/20 (filed 7 September 2020); Do-Hyun Kim and Others v South Korea SKCC (filed 13 March 2020); La Rose and Others v Her Majesty the Queen FCA (appealed 24 November 2020); and Juliana v United States 947 F3d 1159 (9th Cir 2020).
105 Smith v Attorney-General [2022] NZHC 1693 at[193]–[194].
106 Although in a different, less policy-content context, the importance of recourse to judicial review as providing the only effective check on the decision maker was referred to in CP Group Ltd v Auckland Council [2021 NZCA 587 at [136].
107 De Smith’s Judicial Review, above n 98, at [1-003].
108 I agree with Hauraki Coromandel Climate Action Inc v Thames-Coromandel District Council
[2020] NZHC 3228 at [51].
109 De Smith’s Judicial Review, above n 98, at [11-102].
110 Kim v Attorney General, above n 100, at [13] and [15]; and Kim v Attorney-General, above n 102, at [45]–[47].
with caution before intervening in decisions of a specialist expert body tasked with advising on policy issues under the broad legislative framework.111
Evidence
[77] The parties filed extensive affidavit evidence. The Commission refers to the applicant’s affidavits as comprising 253 pages of “so called ‘expert’ testimony”, that is inadmissible “ex-post facto” evidence, challenging “a very wide range of aspects of the Commission’s Advice, including its analytical processes and its substantive conclusions”.112 It has responded to that evidence with a similar volume of affidavit evidence of its own, but also says that much of this evidence would fall away if LCANZ’s affidavit evidence is not admissible. Affidavit evidence has also been filed by and on behalf of the Minister, although neither party objects to this evidence.
[78] I do not address this submission in detail. Much of the applicant’s evidence concerns an explanation of why it says that the Commission’s NDC Advice involved a logical error. While it might be said that it was not necessary to have so many experts explaining the same point, the evidence is within the proper scope of judicial review evidence. It explains the technical difference between the IPCC global pathways and the approach taken by the Commission.
[79] The evidence that explains the difference between MAB and GHGI accounting, and that illustrates how they impact on our ambition and contribution to the global 1.5˚C goal, is in a similar category. This evidence does not require that I rule on contested matters of science – the differences between MAB and GHGI are not in dispute. What is in dispute is whether the Climate Change Response Act required the use of GHGI and whether our budgets meet the statutory purpose and requirements if converted to a GHGI measure. The illustrations and calculations
111 NZ Climate Science v National Institute of Water and Atmospheric Research, above n 86, at [41]; NZ Climate Science v National Institute of Water and Atmospheric Research [2013] NZCA 555 (dismissing appeal); and Smith v Fonterra Co-operative Group Ltd [2022] 2 NZLR 284, [2021] NZCA 552 at [26]: in the context of a tort proceeding, “[c]ourts do not have expertise to address the social, economic and distributional implications of different regulatory design choices. The court process does not provide all affected stakeholders with an opportunity to be heard, and have their views taken into account. Climate change provides a striking example of a polycentric issue that is not amenable to judicial resolution”.
112 The Commission’s written submissions devote 16 pages to this topic and a lengthy table that includes the Commission’s specific objections to that evidence.
described later in this judgment provide the relevant technical evidence to assist the Court to understand this.
[80] That said, it has not been necessary to refer to much of the detail of the affidavit evidence filed by the applicants or the Commission in this judgment. Where I have done so, I have considered the evidence to be admissible as within the expertise of the deponent and substantially helpful to the Court.113
First ground of review: error of logic
Introduction
[81] This ground of review concerns how the Commission measured whether the 2016 NDC was consistent with the 1.5˚C global effort and the percentage by which emissions would need to reduce for an NDC that was consistent with this effort. Specifically, it concerns how the Commission applied global pathways that were consistent with the 1.5˚C global effort, as modelled by the IPCC in the 2018 Special Report, to a domestic pathway that would be consistent with keeping global warming to 1.5˚C.
[82] The 2018 Special Report found that reducing emissions to net zero by 2050 is not sufficient to limit warming to 1.5˚C and deep emissions cuts must be made by 2030 for a 50–60 per cent chance of limiting warming to less than 1.5˚C.114 The IPCC global pathways included calculations of the levels to which emissions would need to reduce by 2030 relative to 2010 levels. These calculations involved a net:net approach. That is, they compared net global emissions in 2010 with the level at which net global emissions in 2030 would need to reduce by to be consistent with limiting global warming to 1.5˚C above pre-industrial levels.
[83] The Commission sought to convert and apply these IPCC calculations to New Zealand’s emissions to provide the Minister with the advice he sought about our NDC. In doing so, it applied a gross:net approach. That is, it used New Zealand’s gross emissions in 2010 (that is, our emissions without subtracting our removals,
113 Evidence Act 2006, s 25.
114 Affidavit of Professor Sims at [14].
rather than 2010 net emissions) in setting the percentage reductions that would be necessary by 2030 to be consistent with the IPCC’s analysis.
[84] LCANZ submits this was a logical (or mathematical) error that renders this part of the NDC advice unlawful. It says a mathematically correct comparison must be done on a “like-for-like” basis.115 It submits that the effect of the logical error is to portray a false degree of ambition for New Zealand’s 2030 target. This is because our gross 2010 emissions are much higher than our net 2010 emissions. This in turn means that the percentage reduction of emissions from gross 2010 levels to a net 2030 target is higher than the percentage reduction from net 2010 levels to that same net 2030 target.116
[85] The Commission submits it made no error. It says there is no ready-made methodology or guidance to assess whether New Zealand’s NDC is consistent with the 1.5˚C global effort. It says it was clear in its NDC Advice that the IPCC pathways could not be directly applied to set New Zealand’s national targets and it did not do so. Rather, it was using the IPCC pathways as a modelling starting point to develop a series of indirect comparators to inform the Commission’s Advice. Its approach reflected New Zealand’s emission profile which differs greatly from the global emissions profile. Specifically, it reflected that the forestry sector in New Zealand has been a net sink for emissions whereas, globally, it is a net source of emissions.
[86] The Minister agrees with the Commission that there was no error. He understood that the Commission was not providing a scientifically based minimum percentage reduction to be consistent with the 1.5˚C global effort. He knew it was underpinned by a value judgement. He was not operating under a mistake of fact about this. He received advice from officials about other approaches to that which the Commission adopted. His decision on New Zealand’s updated NDC involved many
115 Reply affidavit of Dr Bertram, an economist who has filed affidavit evidence in support of the applicant, at [3]. Other experts for LCANZ made the same point.
116 As Professor Piers Forster puts it: “Using a gross:net approach to setting targets can portray a misleading level of ambition. This can be simply illustrated. If a country had gross CO2 of 100 Mt CO2 and net CO2 of 70 Mt CO2 in 2010 and set a target of reducing net CO2 in 2030 to 30% below gross CO2 in 2010, then it could achieve this apparent ambition but with no reduction to either gross or net CO2”.
considerations of which the Commission’s NDC Advice was just one factor. He says the appropriate approach was one on which experts can reasonably disagree.
NDC Advice
[87] In New Zealand, the Minister exercises the prerogative to set and communicate the NDC. By convention, a decision of this nature is made with the agreement of Cabinet.117 New Zealand communicated its first NDC in October 2016.118 This provided that New Zealand committed to reduce net greenhouse gas emissions to 30 per cent below 2005 levels by 2030.119
[88] On 20 April 2020 the Minister asked the Commission, under s 5H of the Climate Change Response Act, for:
2a) a report on New Zealand’s first Nationally Determined Contribution (NDC), including:
a. advice on whether the NDC is compatible with contributing to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5˚ Celsius above pre-industrial levels; and
b. recommendations on any changes to the NDC required to ensure it is compatible with global efforts under the Paris Agreement to limit the global average temperature increase to 1.5˚ Celsius above pre-industrial levels.
[89] In response to this request, the Commission advised that New Zealand’s 2016 NDC was not compatible with contributing to global efforts to limit global warming to 1.5˚C above pre-industrial levels. It further advised that in order for the NDC to be compatible, the contribution New Zealand makes over the NDC period should reflect a reduction in net emissions of “much more than” 36 per cent below gross 2005 levels by 2030. It did not set a specific figure for how much the NDC should be strengthened because that was for Parliament. It did set out some factors for the Government to consider.120
117 Joseph, above n 94, at [20.7.1].
118 Submission under the Paris Agreement: New Zealand’s Nationally Determined Contribution
(2016).
119 This applied Kyoto Protocol accounting which is a gross: net measure. Converted to net:net, it is a commitment to increase net emissions by no more than one per cent above 2005 levels by 2030.
120 Final Advice, above n 3, at 36 and 349.
[90] Following receipt of the NDC Advice, the Minister received several briefings, attended a Ministerial working group and, with the assistance of officials, prepared a paper for Cabinet’s agreement to update New Zealand’s NDC. Cabinet met on 26 October 2021 and agreed an updated NDC. The Minister announced this with the Prime Minister on 31 October 2021 and the updated NDC was communicated to the UNFCCC Secretariat on 4 November 2021.121
[91] The updated NDC is for the period 2021–2030. As amended, it is to reduce net greenhouse gas emissions to 50 per cent below gross 2005 levels by 2030, also expressed as a 41 per cent reduction on 2005 levels using an emissions budget approach.122 It is an economy wide emissions reduction target. New Zealand will provide its first report on progress against its NDC by no later than 31 December 2024.
Commission’s reasoning
[92] In giving the NDC Advice, the Commission explained why it had not recommended a specific figure for the NDC as follows:123
This is a political and ethical issue, which will require elected representatives to make decisions on the importance of factors that contribute to the 1.5˚C goal. Factors include the cost Aotearoa is willing to bear, social and economic impacts, international expectations and reputation, relative comfort with climate risk, and the balance of how much we do at home versus how much we do internationally.
[93]The Commission introduced its NDC Advice by explaining that:124
5There is no universally agreed upon approach to limit the global average temperature increase to 1.5˚C above pre-industrial levels (the global 1.5˚C effort).
6Scientific modelling can help inform our understanding of the global emissions reductions that will be required to limit the global average temperature increase to 1.5˚C above pre-industrial levels. The Intergovernmental Panel on Climate Change (IPCC) has assessed emission reduction pathways it considers would be consistent with a likely chance (50-66%) of limiting the increase on global average
121 Submission under the Paris Agreement: New Zealand’s First Nationally Determined Contribution Updated 4 November 2021 (4 November 2021).
122 On a “point year” basis the updated NDC is expressed as a reduction in net greenhouse gas emissions by 50 per cent below gross 2005 levels by 2030.
123 Final Advice, above n 3, at 349.
124 At 350.
temperature to within 1.5°C above pre-industrial levels (the IPCC 1.5˚C pathways).
7 However, science alone cannot determine the share Aotearoa should contribute to those global reductions. Reaching a conclusion on this also depends on social and political judgements about international equity. These should be made by the Government of the day.
[94] The Advice went on to discuss the IPCC emission pathways. It set out the following table showing the global pathways that limit global warming to 1.5˚C above pre-industrial levels:125
[95] The Advice explained that the Commission converted these global reductions for each of the individual greenhouse gases to reductions at the national level for New Zealand. It then aggregated the individual reductions for New Zealand by converting them to the Global Warming Potentials (GWP) metric to reach comparable figures in carbon dioxide equivalence (or CO2e).126 This approach produced an emissions profile of 527 Mt CO2e (lower quartile) to 608 Mt CO2e (upper quartile) over the 2021–2030 period. These were said to be the converted global pathways at the New Zealand national level. It then set out what the equivalent NDC for New Zealand would be when applying these profiles in the following table:127
125 At 353. This table excludes pathways with high “overshoot” (meaning that they allow global average temperatures to exceed 1.5°C before falling below that level later in the century). This table also provides the interquartile range only.
126 It explains that under the Paris Agreement the emission reductions commitments are expressed using the Global Warming Potentials (GWP) metric to provide carbon dioxide equivalent (or CO2e. (The abbreviation for carbon dioxide equivalence varies in the documents, submissions and affidavits. I have used the CO2e abbreviation). It also explains that it used the GWP measure from the Fourth Assessment Report in describing the alternative NDCs based on the IPCC pathways [see 22.6.2 or 375].
127 Final Advice, above n 3, at 355.
[96] The Advice went on to say that New Zealand’s 2016 NDC works out as an NDC budget of 596 Mt CO2e. This was equivalent to the 67th percentile “putting it towards the higher end of allowed emissions that are compatible with limiting warming to 1.5˚C, using this approach”.128 It illustrates this with the following figure:129
[97] The Advice discussed that because emissions in developing countries will peak later in recognition of their development needs, emissions in developed countries must peak and reduce more quickly than the global average. Recognising this, the Commission considered that New Zealand “should contribute more than the global average required” as it had agreed, as a developed country, to “take the lead”. It considered that the NDC “should reflect emissions much lower than just aligning with the ‘midpoint’ of the IPCC interquartile range”. This meant “emissions of much less than 568 Mt CO2e over the 2021–2030 period, or reductions of much more than 36% below 2005 levels by 2030”. How much more was a “question for elected decision makers, given the social, political and ethical judgments involved”.130
[98] It therefore advised that the 2016 NDC was not compatible with the 1.5˚C global effort. It also provided the following recommendation:131
128 At 355.
129 At 357.
130 At 357.
131 At 358.
1.We recommend that to make the NDC more likely to be compatible with contributing to global efforts under the Paris Agreement to limit warming to 1.5˚C above pre-industrial levels, the contribution Aotearoa makes over the NDC period should reflect a reduction to net emissions of much more than 36% below 2005 gross levels by 2030, with the likelihood of compatibility increasing as the NDC is strengthened further.
2.How much the NDC is strengthened beyond 36% should reflect the tolerance for climate and reputational risk and economic impact, and principles for effort sharing, which require political decisions. Any changes to the NDC should be developed in partnership with Iwi/Māori, to give effect to the principles of Te Tiriti o Waitangi/The Treaty of Waitangi and align with the He Ara Waiora framework.
[99] In a later chapter of the Advice,132 the Commission repeated that setting the level of the NDC required a judgment about matters that were outside its remit.133 It set out some principles and approaches about what a fair contribution to the 1.5˚C global effort might look like for the Government to consider. It discussed that a NDC compatible with the 1.5˚C global effort must make assumptions about how the NDC related to the efforts of other countries. The Commission referred to the three main principles from the IPCC Fifth Assessment Report of equality, responsibility, and capability/need.134 It referred to the main approaches being “equal cumulative per capita emissions”135 and “responsibility/capability/need”136. In general, applying equity approaches implied that New Zealand should make “significantly deeper reductions than the global average”.137 Emissions trajectories based on New Zealand’s relative wealth would lead to deeper reductions by 2030 than the IPCC 1.5˚C pathway range. Emissions trajectories that account for historical responsibility followed a similar path towards net zero by the 2040s. The Commission said the Minister should be clear about any method it used to determine New Zealand’s fair contribution.138
132 Chapter 22, Factors relevant to setting the level of the NDC.
133 At 359. Referring to the potential social and economic impacts of extending the NDC, the expectations of other countries and their governments, tolerance for climate risks, and the relative importance of investing in greater levels of climate change action compared to other domestic or international policies.
[259] I consider that the accounting methodology by which progress is measured comes within the ordinary meaning of “rules”. Accounting methodologies encompass the methods, conventions, policies, practices and procedures that are applied. A particular accounting methodology can equally and naturally be described as the chosen or applicable accounting rules.
[260] This ordinary and natural meaning fits with the context. Climate change accounting is highly specialised. Consistent with the Cabinet and Ministry papers discussed above, it can be expected that Parliament would vest the task of advising the Minister on the accounting rules that should be adopted on the expert independent body it was establishing in the legislation (that is, the Commission). Put the other way, and as the Commission’s submissions put it, it is unlikely that Parliament would establish an expert advisory body and, at the same time, remove from that expert body the task of advising on one of the more complex and difficult issues in New Zealand’s climate change response. Moreover, how emissions and removals are measured may evolve. This is reflected in s 5ZE which provides for emissions budgets to be revised in certain circumstances, including if there has been “methodological improvements to the way that emissions are measured or reported”.
[261] I consider that the natural and ordinary meaning of “rules” and the context support the Commission’s and Minister’s submission that Parliament intended that “rules” in s 5ZA(1)(a) would encompass advice on accounting methodology.
Henry VIII clause
[262] LCANZ submits that adopting MAB rather than GHGI accounting has the substantive effect of changing the meaning of the 2050 Target and what must be done to meet the budgets. It submits that it would raise “Henry VIII” issues.
[263] Henry VIII clauses are provisions that authorise the Executive to amend, by secondary legislation, an Act of Parliament. They are seen as raising constitutional concerns. It is permissible, but requires express authorisation and should be given a narrow and strict construction.263
[264] On the face of it, the requirement for the Commission to advise on the accounting methodology for measuring progress against the 2050 Target, and for the Minister to determine the methodology, is not a Henry VIII clause. The power to
263 See the recent discussion in Idea Services Ltd v Attorney-General [2022] NZCA 470 at [20]–[24]. See also Dean Knight and Edward Clark Regulation Review Committee Digest (6th ed, New Zealand Centre for Public Law, 2016) at 29–30; and Joseph on Constitutional and Administrative Law, above n 94, at 1215.
provide the advice and to determine the methodology is contained in the Act that also sets the 2050 Target. If that advice and determination “amends” the 2050 Target in the Climate Change Response Act, then it is expressly authorised by Parliament as part of the regime under the Act.
[265] The 2050 Target is that “net accounting emissions of greenhouse gases in a calendar year, other than biogenic methane, are zero by the calendar year beginning on 1 January 2050 and for each subsequent calendar year”.264 As the Commission discussed in its Advice, using MAB for measuring progress against the 2050 Target was consistent with the analysis that informed the 2050 Target. The definition of the 2050 Target remains unaltered whether MAB or some other accounting methodology is used to measure the progress against this target.
[266] Similarly, an emissions budget means “the quantity of emissions that will be permitted in each emissions budget period as a net amount of carbon dioxide equivalent”.265 In other words, it is a specified number. That specified number is not amended, suspended or overridden because progress against the number is measured by one particular methodology or another.
[267] The submission that the 2050 Target and the emissions budgets may be amended by the choice of accounting methodology is made because that choice can alter both the timing at which removals from forestry are counted and the calculation of removals depending on the comparator year. That in turn may create incentives to change the accounting methodology from time to time so as to make it easier to stay within the emissions budgets and meet the 2050 Target.
264 Climate Change Act, s 5Q. As set out earlier, it also includes 2030 and 2050 targets for biogenic methane.
265 Section 4 (definition of “emissions budget”).
[268] In support of this submission, LCANZ has filed expert evidence, objected to by the Commission,266 that demonstrates the difference between net forestry emissions267 accounting approaches as follows:268
[269] It is similar to the table the Commission used to show the difference between using GHGI and MAB accounting in its Advice set out earlier.269 The table shows that:
(a)up until 2026 the MAB number is higher than the GHGI number;
(b)from 2026 until 2036 the MAB number is lower than the GHGI number; and
(c)from 2036 until beyond 2050 the MAB number is higher than the GHGI number.
[270] LCANZ submits that this shows the “tilt” in numbers that occurs with MAB relative to the GHGI (being the emissions that the atmosphere sees in each particular year). That is, when comparing a MAB number in 2030 or 2035 as against the MAB number from 2010, the 2010 MAB number is higher than the reality of what the atmosphere sees, and the 2030 or 2035 MAB number is lower than the reality of what
266 To the extent that LCANZ’s evidence seeks to support the merits of its preferred accounting approach, the Commissions submits the evidence is not admissible. It also submits that Dr Taylor is not qualified to provide climate change accounting opinion. I do not accept that Dr Taylor lacks expertise to give the evidence he has. He is qualified to extract and model information using publicly available data. Moreover, the table is essentially the same as that provided by the Commission in its Advice. The Table is helpful to illustrate the point LCANZ makes.
267 A negative number because removals exceed emissions.
268 Affidavit of Dr Taylor at [19].
269 Refer [207] above.
the atmosphere sees. This tilts the axis to make it look like New Zealand is doing more between 2026 and 2030 to reduce emissions than the reality between these comparator years.
[271] The position becomes reversed from 2036. While this is based on assumptions around New Zealand’s forestry in this period, with those assumptions the atmosphere will see greater removals (GHGI) relative to the MAB methodology. This means it will be more difficult to meet our NDC and domestic budgets if MAB is used to measure net emissions than if GHGI is used. LCANZ accepts that this may be a good thing from a pro-climate perspective, but says the problem is that there will be huge political pressure to switch from MAB to GHGI at this time. This is because, if New Zealand is unable to make the reductions in emissions necessary to achieve the 2050 Target or its international commitments, then it may be forced into buying billions of dollars of off-shore mitigation even though we have real removals taking place. Using the above tables, Dr William Taylor estimates that sticking with MAB in this period will involve an additional $35 billion worth of abatement of costs. The concern is therefore that, by using a measure that is favourable to us now, it will cost so much more money in the future and this is not likely to be a stable policy setting.
[272] I accept that LCANZ’s submissions and evidence highlight that the accounting methodology adopted may mean that “net accounting emissions” in any year may be different to the net emissions the atmosphere sees in that year. I also accept that in some periods the choice of methodology may make it easier or more difficult to demonstrate reductions. However, I consider that Parliament has determined that it is for the Commission to advise and the Minister to decide on the methodology by which progress against our emission budgets are to be measured. That is consistent with the Paris Agreement pursuant to which countries are not required to adopt a particular methodology (in contrast with the Kyoto Protocol).
[273] It is not for the Court to speculate on whether there will be political pressure to change the methodology later if that will be fiscally advantageous to New Zealand at that time, nor on the pressures that will be at play not to do so. The important point for this ground of review is that I do not accept that the statutory power to advise the Minister on the rules for measuring progress against our emission budgets or the 2050
Target infringes the principle that delegated legislation may not amend, suspend or repeal primary legislation unless Parliament clearly authorises it. The power to advise on the accounting methodology does not amend, suspend, or repeal the 2050 Target or the emissions budgets and, in any event, Parliament has clearly authorised the Commission to advise on the accounting methodology and for the Minister to determine it.
Conclusion
[274] I therefore conclude that the Climate Change Response Act authorised the Commission to advise the Minister on, and for the Minister to determine, the accounting methodologies for assessing progress towards meeting the emissions budgets and the 2050 Target. The definition of “net accounting emissions” refers to the emissions and removals reported in the GHGI. The definition of the GHGI did not just include national inventory reporting under UNFCCC. It also included Kyoto Protocol and Paris Agreement reports. The legislative history, context and the plain and ordinary meaning of “rules” all support the conclusion that it was intended that the Commission would give advice on the accounting methodology. There is no Henry VIII issue that arises from this interpretation. This ground of review is therefore not made out.
Fourth ground of review: unreasonable
Introduction
[275] This ground of review contends that the NDC Advice and the Budgets Advice were unreasonable. I have earlier discussed the approach I consider is appropriate on this ground of review.270
[276] It is common ground that the IPCC global pathways show a reduction in net CO2 emissions by 2030 of between 40 to 58 per cent relative to 2010 net CO2 emissions. This is sometimes referred to as a “rule of thumb” of 50 per cent for all emissions but in fact emissions of other gases are modelled to reduce more slowly.
270 Refer to the discussion under the heading “Deference and intensity of review”.
[277] LCANZ’s position is that the starting point for New Zealand’s NDC is one that demonstrates we are taking the lead in accordance with the guidance and commitment made under the UNFCCC.271 This was also what the Commission purported to do.272 LCANZ submits that when the gross:net approach of the Commission is converted to net:net, our NDC falls well short of the percentage reductions necessary by 2030 as indicated by the IPCC pathways. LCANZ submits that the NDC Advice is not consistent with the global 1.5˚C goal and New Zealand’s commitments under the UNFCCC and the Paris Agreement and was therefore unreasonable.
[278] Similarly, LCANZ submits that, rather than emissions budgets showing decreasing emissions, the budgets show increasing emissions through to 2030. The emissions budgets are said to have insufficient ambition and to fail to comply with the purpose under the Climate Change Response Act to contribute to the global 1.5˚C goal. The Budgets Advice is therefore said to be unreasonable.
[279] LCANZ’s submissions rely on calculations prepared by their experts, primarily Dr Taylor (an economist), which purport to show that our NDC and emissions budgets are not consistent with the 1.5˚C goal. Affidavit evidence from the respondents contests aspects of these calculations, primarily that Dr Taylor has used a net:net methodology and GHGI. The Commission has put forward different calculations using MAB and a different timeframe and makes the point that the level of ambition is not determined by the methodology used. Dr Andreas Reisinger, in an affidavit filed on behalf of the Minister, has provided a comparator calculation for one aspect of Dr Taylor’s evidence.
[280] The evidence is complex and technical. A judicial review application is not the place to rule on any contests in such evidence. There has not been cross examination, let alone a “hot tub” of experts or some similar process to assist with testing any differences or issues or to assist my understanding of the detail. However, the key contests are whether a gross:net approach is appropriate and whether GHGI or MAB should be used, rather than what the Commission’s gross:net and MAB approach convert to under a net:net GHGI accounting methodology.
271 Refer [21]–[23] above.
272 Refer [97] above.
[281] I therefore consider that the evidence is admissible to illustrate LCANZ’s concerns with the Commission’s approach. I have endeavoured to extract the main points in order to assess whether the NDC Advice or the Budgets Advice were unreasonable as being inconsistent with the purpose of contributing to the 1.5˚C goal; or whether the Commission has properly justified its NDC Advice and the Budgets Advice on the basis of sufficient evidence and reasoning.
Preliminary issues
[282] Some of the affidavit evidence for the Commission criticises statements in LCANZ’s affidavits to the effect that the IPCC global pathways use GHGI. The criticism, however, comes down to the fact that not all developing countries publish greenhouse gas inventories and so the IPCC cannot have used global GHGI as reported in the tables submitted to the UNFCCC, at least not in all respects. LCANZ accepts that, but says the pathways approximate GHGI. That is, if the Commission wished to apply the IPCC pathways to national emissions, then annual net emissions from the GHGI is the comparable accounting comparison.273 This criticism therefore falls away
– the IPCC pathways are sufficiently aligned and comparable with the GHGI for valid net:net conclusions to be drawn.
[283] Some of the Commission’s evidence and submissions could be read as asserting that MAB rather than GHGI is appropriate because target accounting is required under the Kyoto Protocol. While that was so in relation to the first commitment period under the Kyoto Protocol, that is not the case for our NDC, nor our domestic emissions budgets. It may be that the reasons behind the Kyoto Protocol accounting rules still have merit for New Zealand going forward, but it is not the case that we must continue with a methodology that treats pre-1990 forests differently from other emissions and removals.
273 For example, Professor Forster, who is a leading author of the relevant chapter of the 2018 Special Report, says that to make a comparison with the IPCC global pathways a “standard accounting practice would use annual net missions similar to the Greenhouse Gas Inventory”.
What is the NDC in net:net terms using GHGI
[284] Dr Taylor calculates that a target of reducing net emissions by 50 per cent below gross 2005 levels by 2030, equates to a reduction of 22 per cent or 23.6 per cent from net 2005 levels.274 Dr Reisinger uses a slightly different methodology, as well as updated removals data from the updated NDC, to make the same comparison. He calculates the net 2030 target as being about 35 per cent below net 2005 emissions. This is similar to Dr Taylor’s updated calculation of 32.1 per cent when keeping to his methodology but using the removals data from the updated NDC.
[285] Whichever one of these numbers is used, LCANZ’s point is that this contrasts with the New Zealand “headline” reduction of 50 per cent by 2030 in our updated NDC.275 LCANZ submits that an NDC that falls well short of the percentage reductions necessary by 2030 as per the IPCC pathways, from a country that has committed to take the lead, and is patently unreasonable when, as the Commission says in its Advice about the IPCC pathways:276
Within all these pathways, limiting warming to 1.5˚C requires the world to rapidly reduce emissions of all greenhouse gases between now and 2030.
What are the budgets in net:net using GHGI
[286] LCANZ also says that the budgets do not meet their purpose of contributing to the 1.5˚C goal. It says that on a net:net basis, using GHGI rather than MAB, our net CO2 emissions will increase between 2010 and 2030. In support of this, Dr Taylor’s evidence is that:
(a)Based on the data from the Advice, our net CO2 emissions will increase during this period from 5.0 Mt to 20.7 Mt, an increase of 310 per cent.277
274 The difference being whether AR4 or AR5 is used.
275 Submission under the Paris Agreement: New Zealand’s First Nationally Determined Contribution Updated 4 November 2021, above n 121.
276 Final Advice, above n 3, at 191.
277 Similarly, Dr Stephen Gale, an economist and practical mathematician who filed an affidavit in support of LCANZ’s position, calculates that from a 5.048 Mt net CO2, an IPCC global pathways compliant 2030 target would be 2.574 Mt. Professor Forster agrees with this evidence.
(b)Based on updated removals data obtained from the updated NDC, our net CO2 emissions will increase during this period from 5.0 Mt to
12.4 Mt, an increase of 145 per cent.
(c)When looking at all greenhouse gas emissions, based on data from the Advice, the increase will be from 48.6 Mt to 58.2 Mt, an increase of 20 per cent.
(d)When looking at all greenhouse gas emissions, based on the updated NDC, the increase will be from 48.6 Mt to 53 Mt, an increase of nine per cent.
[287] Dr Taylor contrasts the difference of our decade by decade emissions (covering historic emissions and the emissions budgets to 2030). Using MAB they look like this:
[288]Using GHGI net, they look like this:278
278 It is not in dispute that New Zealand’s emissions (gross and net) increased between 1990 and 2020. The largest increase was between 1990 and 1999 and the rate of decade growth has since stabilised.
[289] The difference between MAB and GHGI in terms of total quantity of CO2e is not great between 2020 and 2030 (26 Mt). However, the important point from LCANZ’s perspective is that the Commission’s budget for this period show an increase in emissions rather than a decrease. This increase is what the atmosphere will actually see during this period (because that is what GHGI measures).
[290] LCANZ submits that it is irrational and unreasonable to propose budgets that would see net CO2 emissions increasing over the next decade given the unprecedented risks that global warming poses for humanity and the critical role of reducing emissions by 2030. Further, the actions needed to achieve net zero CO2 emissions by 2050 will be made more difficult and cumulative emissions will increase and contribute to global warming in the meantime. It submits the Budgets Advice, allowing this increase in emissions in the period to 2030, is patently unreasonable in the face of the climate emergency.
Commission’s justification
[291] The Commission describes LCANZ’s evidence as an “accounting trick”. This is because all that LCANZ has done is put the tree cycle back into the mix as this is the effect of using GHGI rather than MAB. It says New Zealand has never used GHGI for setting its targets and measuring progress towards them and there is no sound basis for New Zealand to do so now.
[292] The Commission says that its Advice, if implemented (as it essentially was), reduces emissions for each budget period and, by the early 2030s, net CO2 emissions
will have reached the IPCC “rule of thumb” 50 per cent reduction from 2005/2010 emissions. On a gross:net basis CO2 reduces to 55 per cent by 2033. On a net:net basis it reaches 50 per cent by 2033. Further, New Zealand’s CO2 domestic emissions will reach net zero by 2038, well before the IPCC goal of 2045–2050.279 These reductions are based on MAB.
[293] The Advice illustrates the reduction in CO2e emissions in the budgets with the following table:280
[294] The Commission illustrates the difference in this table and Dr Taylor’s table as follows:
(a)When this picture (the budgets):
(b)is combined with this picture (the trees):281
279 Final Advice, above n 3, at 193.
280 At 81.
281 Affidavit of Renee Murray at [27].
(c)we get LCANZ’s budgets that showing the increase in emissions:282
[295] That is, the downward budgets shown in the Commission’s table at [293] combined with the tree cycle produces the yellow increase of emissions between 2020 and 2030 in the table at [288]. The choice of MAB rather than GHGI net alters whether our emissions will appear to have increased or decreased between 2021 and 2030 relative to the previous decade.283
[296] The Commission submits that LCANZ’s approach lacks analytical integrity because it abruptly stops at 2030. In this period, as the graphic at [294(c)] shows, the tree cycle is on the upward swing. That is, while the trees are still a net source of removals, in the period between 2020 and 2030 they are capturing less CO2. The tree cycle tops out at around 2030. After that, the cycle turns and removals increase at a sharp rate. In the twenty years that follow 2030, regardless of what New Zealand does
282 Affidavit of Dr Taylor at [114].
283 Although the difference in the period between 2021 and 2030 as between MAB and GHGI is relatively small because there is only a small difference in MAB and GHGI net removals in this decade. As I understand it, there is a greater difference in MAB and GHGI net removals for earlier decades as Dr Taylor’s table shows.
or does not do in terms of climate action, our emissions profile will decline steeply by including the trees (that is, using GHGI) and reach zero carbon by 2050 by doing nothing.
[297]This is illustrated by the following table:284
[298] The Commission’s explanation for its approach has been set out earlier ([100] and [203]–[213]) and was discussed in the Consistency Advice ([120]). For present purposes, the following part of the supporting volumes to the Advice serves to make the main points for the Commission:285
Net-net accounting can be problematic for countries like Aotearoa whose net emissions are strongly influenced by a large area of production forests. Our forests have an uneven age class due to high planting rates over certain historic periods, causing large fluctuations in forest emissions over time ... This means that changes in net emissions between any two years can give a distorted view of the underlying long-term changes in forestry emissions. For example, if a country were at a harvesting peak or trough in the base year, net-net accounting would give an unjustified gain or loss.
Gross-net accounting therefore avoids the counting of gains or losses that are largely arbitrary effects due to the base year chosen. It also helps to track progress in relation to factors that can reasonably be influenced by human interventions now to reduce emissions or safeguard forest sinks, rather than the legacy effects of past decisions.
If viewed over the long term, production forests deliver no additional carbon sequestration benefits after the first rotation, as the carbon sequestered as they grow is emitted after they are harvested. Factoring out the emissions and removals from pre-1990 forests for accounting purposes therefore presents a
284 Affidavit of Paul Young at [48].
285 Supporting Evidence, above n 11, at [3.4.2].
more accurate picture of our efforts to reduce net emissions so long as the land remains used for forestry on an ongoing basis. However, if these pre-1990 forests are cut down and the land converted to a different use, the deforestation emissions are counted towards targets.
The gross-net approach also recognises that carbon removals by forests are qualitatively different to reductions in gross emissions. Removals by forests can compensate for a fixed amount of gross emissions at a given point in time, but do not reduce the ongoing production of gross emissions in the long term. In this way forests can temporarily offset gross emissions but can never be a permanent solution.
The Kyoto Protocol acknowledged the importance of reducing emissions at source and differentiated between situations where the land sector was a source or a sink of emissions in the base year. Where land was a source of emissions in the base year, the Kyoto Protocol required targets be set to reduce land emissions on the same basis as gross emissions (net-net). Where land was a net sink of emissions in the base year it recognised that forest sinks could only temporarily offset gross emissions, and so targets are set on the basis of gross emissions levels (gross-net).
Finally, the NDC for Aotearoa will use averaging to account for emissions and removals by post-1989 forests from 2021. This makes the distinction between gross-net or net-net accounting less of an issue. Averaging factors out fluctuations in net emissions by forests to an even greater extent than the Kyoto Protocol accounting used for previous targets. With averaging, the progress tracked is driven primarily by the areas of new forest planted and the amount of deforestation. If this accounting method were extended over forest emissions and removals for Aotearoa back through time, gross and net emissions at the start of 1990 would be the same.
[299] In short, the Commission recommended an accounting methodology that removes the cyclical effects of trees. It regards this as consistent with the Kyoto Protocol. The averaging component of MAB ensures that the credit New Zealand gets from a new forest represents the sustained and long-term overall reductions that the forest actually represents. Ensuing that only long-term sustained reductions in emissions (from new additional activities) are counted towards the NDC target and in measuring progress against the Budgets is in accordance with the concept of additionality.
[300] The Minister agrees with the Commission that the key feature of target accounting is additionality; that is, accounting for climate action in a way that is different to business as usual. The Kyoto Protocol set a baseline of 1990 and sought to incentivise additional climate action beyond that date, which would not otherwise have occurred. Target accounting is designed to incentivise emissions reductions and to avoid relying on actions that occurred before 1990 (such as forest planting in the
1970s and 1980s for entirely non-climate change related reasons) that continue to result in emissions and removals for today. MAB accounting is a variation on the target accounting New Zealand has been using since 2008.
[301]Similarly, Dr Brandon explains:286
Applying MAB accounting to planted production forests eliminates the ongoing crediting and debiting cycle that is a characteristic of sustainably managed forestry operations. The cycle of growth, harvest and replant masks the real trends that are occurring in the LULUCF sector that would demonstrate the effectiveness of policies that protect and enhance carbon sinks and reservoirs. This is because the planted production forests are not providing long-term permanent additional carbon storage once they have reached their long-term average carbon stocks.
…
The decision to exclude business-as-usual net emissions from pre-1990 forests in accounting for our emissions reductions targets meets a key principle that is fundamental to driving climate action, that of additionality. …
Additionality is a key criterion that helps to maintain the environmental integrity of the Paris Agreement. Additionality is achieved when GHG emissions abatement benefits are over and above those that would have arisen anyway.
[302] Dr Bertram responds that New Zealand’s record under the Kyoto Protocol has had the opposite effect of incentivising changed behaviour. He points out that, having “secured a licence” under the Kyoto Protocol to make its commitment in gross:net terms, New Zealand was thereafter able to meet its commitments in 2008–2012 and 2013–2020 almost entirely relying on its growing forests, with no serious effort to change behaviour in relation to gross emissions. Dr Bertram goes on to acknowledge, as does Dr Taylor, that after 2030 the MAB approach (as compared with net:net GHGI), would mean greater stringency based on current projections – as illustrated by the blue line after 2030 in [207] and [297] above.287
[303] LCANZ says that the primary issue with MAB is the time it is being introduced. Introducing it now makes it much easier to meet the NDC commitment (claiming falling net emissions when in fact GHGI net emissions will be rising over this period). There is then the risk of a “flip-flop” when GHGI net shows a dramatic
286 Affidavit of Dr Bandon at [51], [58.2] and [58.3].
287 Reply affidavit of Dr Bertram at [57] and [71].
fall in emissions – the blue line after 2030 in [207] and [297] above. In other words, it will not be a durable and politically feasible metric for tracking New Zealand’s emissions.
[304] In assessing the respective positions, the first point is that I do not accept the Commission’s submission that LCANZ’s evidence is an “accounting trick” or that it lacks “analytical integrity”. It is unarguable that the timing of emission reductions matters, that the “rule of thumb” for keeping warming to 1.5˚C is a 50 per cent reduction by 2030, and our NDC is a commitment that relates to 2030. New Zealand’s net emissions at 2030 are therefore a highly relevant consideration. GHG is the best measure of what the atmosphere will actually see in the decade to 2030.
[305] Nevertheless, I consider that the Commission has sufficiently justified on the evidence and its reasoning its choice of accounting methodology. Professor Forster acknowledges New Zealand’s emission profile of small fossil CO2 emissions, a large forest sink and large biogenic methane is “very different” from the global average.288 While saying that New Zealand’s reduction target for 2030 does not align with the global 1.5˚C goal, he does say that “[o]verall I found [the Commission’s] justifications to be well argued and I accept both approaches [gross:net and MAB] as being reasonable”. On a MAB approach, New Zealand’s CO2 domestic emissions will reach net zero by 2038, well before the IPCC goal of 2045–2050. In GHGI terms, New Zealand’s contribution may not match the IPCC global pathways at 2030 but it will do better than those pathways in fairly short order after that.
Is this consistent with contributing to the global 1.5˚C goal?
[306] It is important to keep in mind that Parliament did not require that New Zealand meet a 2030 target. Despite submissions to the select committee seeking a 2030 target, requiring reductions of 45 to 40 per cent by 2030, this was not taken up in any amendment to the Bill. Parliament decided on a 2050 net zero. It established the Commission to provide advice on what the pathway to 2050 should be via a series of emissions budgets.
288 Professor Sims provides further details about this.
[307] In light of the statutory scheme, it was reasonably open for the Commission not to mirror the IPCC global pathways. Contributing to the 1.5˚C global temperature goal was one of the purposes of the statute and a very important consideration, but the manner of that contribution was not fixed to those pathways. Relevant to New Zealand’s contribution is our unusual emissions profile and the swamping effect of the cyclical tree cycle. The Commission, the expert body tasked with considering this, formed the view that our appropriate contribution was one that made less of a contribution to that goal up to 2030 (in GHGI terms) but a contribution that was better than the IPCC global pathways in a short time thereafter. It made the decision that a stable policy, not swamped by the cyclical effects of trees, would best drive behavioural changes necessary to respond to the climate emergency. Moreover, emissions budgets are not the only contribution New Zealand will make to global efforts to combat climate change. New Zealand’s NDC includes extensive offshore mitigation to emissions reductions.
Sufficiently ambitious?
[308] One of the criticisms of the Commission’s assessment of the relevant considerations is that it did not carry out a cost benefit analysis of different levels of ambition. Dr Taylor accepts that it is not possible to quantify all benefits and costs of different levels of ambition. He says that what could be quantified, should have been, to enable for more informed decision making.
[309] A related point is that LCANZ submits the Commission should have carried out an analysis of the cost of offshore mitigation. While the Commission assessed the costs of a more ambitious NDC, it did not assess whether additional domestic mitigation will be cheaper than offshore mitigation. The answer to this is found in the Commission’s Advice. It carried out a qualitative assessment where emissions budgets were set at the level of the NDC. It considered the impact of doing so would be unmanageable.289
[310] I accept that quantification models can assist with decision making but it is just one method of analysis. The Commission’s process and analysis was extensive.
289 Final Advice, above n 3, at 364.
Balancing ambition with other relevant factors is quintessentially poly-centric. Absent a clear and material error in the analysis or the information relied on by the Commission, which has not been identified, there is no proper basis for this Court to conclude that the Commission’s analysis has erred. The mathematical error relied on by LCANZ might have been such an error, but it was not established and did not affect the Minister’s understanding of the Advice. The absence of a (partial) quantitative analysis of various levels of ambition falls far short of establishing that the Commission’s advice as to the level of ambition was unreasonable.
Unreasonable not to do more?
[311] In a range of ways, the affidavits for LCANZ compare New Zealand’s contribution with contributions measured on other equity principles. For example, Dr Bertram points out that of the seven equity principles by which our contribution to the 1.5˚C global goal is measured in the Consistency Advice ([122] above), the gross:net approach recommended by the Commission is by far the least ambitious.290 Professor Ralph Sims refers to the Yale Centre for Environmental Law & Policy which shows that New Zealand ranks 166th out of 180 countries when ranked from lowest to highest per capita emitters. In terms of historic cumulative emissions per capita CO2 analysis by Carbon Brief, from 1850 to 2021 New Zealand is one of the highest emitters.291 Dr Rogelj refers to a recent peer-reviewed study that estimates that New Zealand’s internationally fair contribution to a global pathway that would keep maximum global warming below 1.7˚C implies at least a 67 per cent reduction in net:net emissions by 2030 relative to 2010.292
[312] Ultimately, however, Parliament tasked the Commission with recommending budgets in accordance with the statutory considerations it set out. Those considerations include: what is technically and economically achievable; the distribution of those impacts across the regions and communities of New Zealand and from generation to generation; the economic circumstances and the likely impact of the Minister’s decision on taxation, public spending, and public borrowing; the implications, or potential implications, of land-use change for communities, and the
290 Reply affidavit of Dr Bertram at [64].
291 Reply affidavit of Professor Sims at [10].
292 Affidavit of Dr Rogelj at [12].
responses to climate change taken or planned by parties to the Paris Agreement or to the Convention. Some or many of these factors could point away from a contribution that met or exceeded the IPCC pathways by 2030. Taking into account all the relevant considerations, the Commission concluded that more ambitious targets would mean transitioning faster than real-world constraints for deploying technology, developing supply chains, infrastructure and markets would allow and would have significant consequences. It also concluded that meeting the NDC solely through domestic action would be highly challenging and risk severe impacts.
[313] Ultimately, a reasonable decision depends on what Parliament tasked the decision maker to decide. Parliament did not task the Commission with a particular model by which to recommend budgets that would contribute to the 1.5˚C global goal. I am not satisfied that LCANZ has shown that the Commission’s Advice fell outside its statutory task to provide Advice consistent with the purpose of the Climate Change Response Act. Its Advice was driven by the need for clear and stable climate change policies that would meet net zero by 2050 and would contribute to the 1.5˚C global goal. It did not act unreasonably or irrationally. I accept that MAB was chosen to provide a stable accounting method, intended to drive changes that would lead to emissions reductions in ways above and beyond relying on existing forestry removals. Any opportunistic change when GHGI removals exceed MAB removals will no doubt be met with challenge should that be contemplated at some future point.
Result
[314]The judicial review application is dismissed.
[315] If there are any questions as to costs, the parties may submit brief submissions (seven pages) within three weeks of the date of this judgment. I note that the Commission was critical in a number of respects about LCANZ’s position and approach. It may be helpful for the Commission to be aware that I saw no real merit in that criticism. The Commission task is a very important one. Professor Donald Wuebbles describes climate change as “not only quickly developing into the most important issue of our time, but perhaps the most important issue humanity has ever faced”. Judicial review provides an important check on this very important statutory
task vested in the Commission. Challenge and debate can lead to better outcomes. Unsuccessful challenges can bring with it the public benefit of legitimacy to the Commission’s work.
Mallon J
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