What the ICJ ruling means for Australia’s environment laws 

International climate obligations

The International Court of Justice (ICJ) has handed down its Advisory Opinion on the Obligations of States in respect of Climate Change. The Opinion confirms that States, including Australia, have binding obligations under international law to prevent significant harm to the climate system.  

One of these obligations requires State governments to assess how significant industrial activities contribute to global greenhouse gas emissions – including downstream (scope 3) emissions, and including activities undertaken by private actors.

The Australian Government’s current proposal to exclude consideration of projects’ greenhouse gas emissions from environmental impact assessments under the reformed Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) appears to be inconsistent with its obligations under international law, and may thus expose Australia to legal liability.

The ICJ Opinion: Governments must assess the climate risks of significant industrial activities  

The ICJ examined obligations arising under a wide range of treaties and customary international law. This brief focuses on the parts of the Opinion most relevant to EPBC reform.  

States are under a recognised obligation, as a matter of customary international law, to prevent activities within their borders from causing significant harm to the environment of another State (para [272]). In this Opinion, the Court confirmed that this duty to prevent significant harm applies to the climate system, as an integral part of the environment (para [273]).  

This duty does not rest exclusively with the end users of fossil fuels, but also extends to the ongoing production, licensing and subsidising of fossil fuels (paras [94], [427]). 

Due diligence requires climate impact assessment

The duty to prevent significant harm to the environment – including the climate system – is a duty to ‘act with due diligence’ (para [280]). One component of fulfilling this obligation to act with due diligence is to undertake environmental impact assessment, including where an activity’s impacts may occur beyond a State’s borders (para [296]-[297]). 

The Court was explicit, advising that: 

“Specific climate-related effects must be assessed as part of [environmental impact assessments] at the level of proposed individual activities.” (para [298]) 

This obligation extends to assessing the risk of significant harm to the climate system arising from greenhouse gas emissions. Importantly, this extends to the impacts of activities undertaken by private actors (paras [276], [282], [428]), and to the ‘possible downstream effects’ of proposed activities (para [298]) - for example, the contribution to climate change made by greenhouse gas emissions from the use of coal produced in one State and exported to another. 

The Court concluded that it is:

“mportant that all States provide for and conduct [environmental impact assessments] with respect to particularly significant proposed individual activities contributing to GHG emissions to be undertaken within their jurisdiction or control, on the basis of the best available science.” (para [298])

Australia has no national framework for assessing climate risk from individual projects 

There is currently no federal law to ensure that the specific risks posed to the climate system by individual activities’ greenhouse gas emissions are properly assessed. 

The Safeguard Mechanism is not an impact assessment framework. It does not require proposed projects’ emissions to be assessed before approval, nor is there any avenue for any Minister or regulator to prevent highly polluting projects from proceeding, even where project emissions are incompatible with Australia’s national emissions reduction targets or the Paris Agreement goal of limiting global warming to 1.5°C.  

While some State and Territory environmental laws require project proponents to disclose anticipated GHG emissions, this is not universal. 

Current EPBC reform proposals may leave Australia in breach of international law 

The federal government currently does not intend to incorporate any assessment of proposed projects’ climate risks into the EPBC Act reforms.  

At most, Environment Minister Murray Watt has flagged that the reforms will require the disclosure of direct (but not downstream) emissions, and the submission of the ‘strategies and measures’ a project proponent will put in place to ‘manage’ its emissions. However, neither the disclosed emissions nor the emissions management measures are intended to form part of the impact assessment decision under the new Act.  

A failure to incorporate climate risks into environmental impact assessment laws may constitute a failure by Australia to act with due diligence to prevent significant harm to the climate system, exposing Australia to potential liability under international law.  

Government reasoning inconsistent with the ICJ’s findings 

The federal government has argued: 

• the Paris Agreement means Australia is not responsible for the harm caused to the climate system by GHG emissions from fossil fuels exported overseas, and  
• the incremental emissions from each new coal mine or gas facility in Australia are too small to constitute a significant impact on the global climate or Australia’s environment.

This reasoning was most recently deployed in Minister Watt’s decision to approve the North West Shelf gas project extension.  

However both of these arguments are inconsistent with the ICJ’s Advisory Opinion. 

The Court held that the duty to act with due diligence to prevent significant harm to the climate system applies to downstream emissions.  

 Importantly, the Court also commented that even though

‘it is the sum of all activities that contribute to anthropogenic GHG emissions over time, not any specific emitting activity, which produces the risk of significant harm to the climate system’... ‘this does not mean that individual conduct leading to emissions cannot give rise to the obligation to prevent significant transboundary harm even if such activity is environmentally insignificant in isolation’ (para [277]).