New Zealand’s Climate Change Response Act 2002 (as amended 2019) sets a goal of net-zero emissions by 2050, and creates a Climate Change Commission (“CC Commission”) to provide periodic advice to the government in meeting that goal. On July 1, 2021, a group of hundreds of New Zealand lawyers sued the country's Climate Change Commission and the Minister for Climate Change arguing that several pieces of advice provided by the CC Commission had violated New Zealand administrative law.
First, the Commission provided advice that New Zealand’s NDC was not consistent with the global target of limiting global warming to 1.5 degrees Celsius. LCANZ challenged that advice as being based on a faulty methodology which amounted to an “error of logic” (para. 81). Specifically, LCANZ argued that the CC Commission’s “gross-net” measure – whereby net emissions in the target year were compared with gross emissions in the base year – was impermissibly inconsistent with the IPCC’s approach of comparing net emissions in the target year with net emissions in the base year (a “net-net” measure). The Commission defended this approach on the basis that New Zealand’s forestry sector has been a net sink, rather than a source, of emissions – this meant that unlike many other countries, New Zealand’s land use net emissions were lower than its gross emissions. Although LCANZ agreed with the CC Commission that the 2016 NDC was inconsistent with measure to limit global warming to 1.5 degrees, the accounting method adopted meant that the gap was understated; and that as a result, if the government were to follow the Commission’s advice, there would be a net increase in greenhouse gas emissions for the 2010-2030 period. Accordingly, LCANZ argued that the Commission had violated its statutory duty. Secondly, LCANZ argued that the Commission had erred in its advice that it prepared for the government concerning New Zealand’s emissions budget – that is, a maximum level of emissions that can be released in specific interim periods so as to enable the 2050 goal to be ultimately reached. LCANZ argued that the Commission had impermissibly focused only on the 2050 goal, rather than 1.5 degree limit; and further, that the Commission had pursued “economically affordable” budgets rather than the statutory requirement that budgets be “ambitious but likely to be technically and economically affordable”. Thirdly, LCANZ challenged the Commission’s use of “modified activity-based accounting” (MAB) in recommending progress towards budgets and targets. Among other things, this approach averaged out New Zealand forestry stocks and emissions. LCANZ argued that this violated a statutory obligation to use an accounting method aligned with that used by the UNFCCC, and that this violation “portrayed a false sense of ambition” (para. 9). Finally, LCANZ argued that the Commission’s budget advice was “irrational, unreasonable and inconsistent with the legislative purpose of contributing to the global 1.5 degrees effort”, because it would ultimately allow for emissions to increase over the 2010-2030 period. This ground dealt more with the consequences of the foregoing alleged errors, rather than a specific breach of a statutory duty.
On November 3, 2021, the applicants filed an amended statement of claim, to also challenge New Zealand's updated first nationally determined contribution (NDC) under the Paris Agreement to the extent that it relies on the Commission's NDC advice. The applicants seek relief including orders that the Commission re-consider the first three emissions budgets and their advice relating to the 2030 NDC, and that the Minister re-consider the updated NDC.
The hearing took place from 28 February to 3 March 2022. On November 23, 2022, the High Court rejected all four claims. First, it found that it departed from IPCC modeling techniques and that this “had the potential to mislead” (para. 115), this departure was permissible because the Commission did “not intend to make a direct mathematical comparison”, and instead used the IPCC modeling “only as an indirect comparator” (para. 11). The Commission was entitled to adopt the gross-net accounting methodology to avoid New Zealand being penalized for its historically high rate of reforestation. The Court found that the Minister was aware of the potential to be misled, and had understood that the emissions cuts recommended by the Commission were not necessarily in line with the IPCC global pathway. Instead, it represented a value judgment that New Zealand should not be disadvantaged relative to other wealthy countries because of its historical its forestry position.
Secondly, the Court found that the Commission had correctly understood its role as being to provide budgeting advice on achieving both the 2050 net-zero target, while keeping in mind a broad commitment to contributing to the global 1.5 degree effort. Importantly, the Court found that the 1.5 degree target – which was included only in the purposive section of the domestic legislation – was “an aspiration rather than an obligation” for the purposes of domestic law (para. 162). The Commission was required only to consider statutory factors related to the 2050 net-zero target, while keeping the 1.5 degree target in mind. The Commission’s budget advice had satisfied these obligations. Thirdly, the Court found that the Commission was entitled to recommend the MAB accounting method, as the legislation did not mandate the use of any particular accounting methodology. Instead, it found that the Climate Change Response Act permitted the Commission “to advise the Minister to decide on the methodology by which progress against our emission budgets are to be measured” (para. 272). Finally, the Court found that the Commission’s advice was not ultimately irrational or unreasonable, and instead “reflected New Zealand’s particular circumstances as a developed country, but with significant commercial forestry with cyclical swings” (para. 11). Even though the Commission’s advice would fail to reduce net emissions by 2030, the legislation did not require emissions reductions by that date, and instead was only required to meet the net-zero 2050 target. It was open to Parliament to decide to make “less of a contribution to that [net-zero] goal up to 2030 … but a contribution that was better than the IPCC global pathways in a short time thereafter” (para. 307).