Climate Change: Losing the battle but winning the war

Aotearoa declared a climate emergency in 2020. Despite this, the government granted petroleum exploration permits to two companies in 2021, letting htem explore for gas and, if successful, convert the permit into a mining permit. Climate Clinic Aotearoa (previously Students for Climate Solutions) have been challenging that decision in the courts ever since, and losing at every turn. Today, they lost their final appeal in the Supreme Court. But in doing so, they might have won the war, because the Court ruled that Ministers must consider climate change when offering permits:

The country's highest court has found that governments must consider climate change when deciding whether to offer oil and gas blocks for tender.

The Supreme Court dismissed an appeal on Friday that former Energy and Resources Minister Megan Woods was required to take climate change into account when she granted on-shore exploration permits to two companies in 2021.

However, the court found that climate change is a mandatory consideration at the earlier stage of offering blocks for tender.

Climate change was "so obviously relevant" to a decision that could lead to the extraction and consumption of fossil fuels that it must be considered, the panel of five Supreme Court justices ruled.

The full judgement is here, and there's a bunch of good stuff in it. First, the court found that the words "for the benefit of New Zealand" in the Crown Minerals Act's purpose clause isn't just meaningless praise for the mining industry, but an actual constraint. Prospecting, exploration, and mining can be carried out only when it is "for the benefit of New Zealand". Which means Ministers must assess that overall benefit. The court is clear that they have pretty wide latitude, but there are things they need to consider beyond just jobs and GDP.

Secondly, the headline: thanks to our international agreements and the scale of the issue, climate change is so obviously relevant that it is a "mandatory consideration", something the Minister has to consider.

So why didn't Climate Clinic win the case? Because they were too late. The government argued, and the court agreed, that the important step where climate change must be considered is the decision under s24 of the Act to allocate permits by public tender - what the government calls a "block offer".

This is because the decision to offer an area for tender is an in-principle decision that exploration may be permitted in the area. And as the respondent concedes, the process thereby set in motion is undertaken in expectation that successful exploration may in the future lead to successful extraction of petroleum. We accept also that it would undermine the promotional intent of the CMA to invite tenders pursuant to a s 24 decision but then decide under s 25, and for reasons that could have been weighed at the s 24 stage, not to allocate any permits. Such an approach would not build the investor confidence necessary to promote exploration and mining.

But that decision was made in 2020. Climate Clinic was challenging the 2021 decision under s25 to grant the permits. They needed to go to court earlier and challenge the block offer decision itself. Also significant is that, while not required to do so, the Minister of Resources at the time, Megan Woods, did consider climate change to some extent in her s25 decision-making, at a level of the court found appropriate given the limited climate change framework in existence at the time (a 2050 target, but no budgets or emissions reduction plan).

So what does this mean for the future? It seems like it will be very hard for future governments to lawfully open block offers, unless they can demonstrate that they are consistent with climate budgets and targets. And while the regime has moved away from the block offer system in favour of allowing direct applications for petroleum permits, it is going to cause problems for that as well. Because if climate change is a mandatory consideration for a block offer, its hard to see how it will not be for essentially a direct grant, and the problems the court identified of opening land for exploration then not actually allocating any permits would not arise.

So, when the regime decides to hand out gas permits to its foreign cronies early next year, that decision should be challenged. Given the regime's demonstrated problems with both proper record-keeping and making lawful decisions, such a challenge is likely to prove successful (for example, it will be hard for regime lawyers to argue that Shame Jones, a man who rants about "green banshees" and "demonic eggbeaters" while spewing outright climate denial into the parliamentary record, approached the issue of climate change with the open mind required of a decision-maker). And at the least, it will delay any permits until after the election, allowing the next government to surrender in court and accept their revocation.