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Lawyers for Climate Action NZ v. Minister of Climate Change - press release

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Lawyers for Climate Action NZ v. Minister of Climate Change - decision

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Lawyers for Climate Action NZ v. Minister of Climate Change - points of claim

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The applicant, a climate change NGO, challenged regulations promulgated by the respondent under New Zealand’s Climate Change Response Act 2002 (“the Principal Act”). These regulations – the Climate Change (Auction, Limits and Price Control for Units) Amendment Regulations 2022 (“the Amendment Regulations”) – set unit limits and price controls under New Zealand’s emissions trading scheme (ETS) for a five-year period (2023-2027). The applicant argued that these regulations were inconsistent with the Principal Act. 

Before the matter went to a full merits hearing, the parties reached agreement on error and relief. The Court ratified that agreement in this decision, finding the Amendment Regulations to be ultra vires the Principal Act, and requiring the Minister to reconsider the unit limit and price control settings (that is, minimum reserve prices, trigger prices for reserve sales, and the amount of reserve domestic units) for the 2023-2027 period.

The Principal Act requires the ETS unit limits and price control settings to be set taking into account New Zealand’s nationally determined contribution (NDC) under the Paris Agreement, emissions budgets, and statutory target, as well as a list of matters set out at s 30GC(5)-(6) of the Principal Act. The Amendment Regulations set the price control settings at levels far lower than those projected by New Zealand’s own Climate Change Commission had recommended as sufficient to meet New Zealand’s emissions budget and target. 

Although the Minister had originally recommended following the Commission’s advice, this recommendation was later revised following a directive from New Zealand’s Cabinet. Cabinet had deviated from the Commission’s settings because of concerns that higher ETS settings could inflate fuel and energy bills. In the course of the litigation, however, the Minister acknowledged that he had erred. Specifically, he accepted that he lacked reasonable grounds toe be satisfied that the Amended Regulations were in accordance with New Zealand’s 2050 target, emissions budgets, and NDC; and alternatively, that any deviation from these standards could not be justified by other matters prescribed in the Principal Act. Although he argued that such settings were not necessarily inconsistent with these standards, he accepted it was unreasonable to arrive at these settings based on the analysis that he had carried out.

Following agreement between the parties, the Court ordered that the Amendment Regulations be reconsidered to ensure that, as per the Principal Act, they were: (1) in accordance with New Zealand’s 2050 target; and (2) strictly in accordance with New Zealand’s emissions budgets and NDC, or alternatively, in accordance with them, with discrepancies justified by matters set out in the Principal Act. The Minister must reconsider the settings by September 30, 2023.

Lawyers for Climate Action NZ v. Minister of Climate Change

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A target to reduce the prevalence of a greenhouse gas over a specific time frame

A commitment to balance GHG emissions with removal by a certain point in time, effectively reducing the net emissions to zero

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Lawyers for Climate Action NZ v. Minister of Climate Change - press release

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