On 8 February 2019, Chief Justice Preston of the NSW Land Environment Court, delivered his decision in Gloucester Resources Limited v Minister for Planning  NSWLEC 7, in which he confirmed a decision to refuse permission for a new open-cut coal mine, known as the "Rocky Hill mine", near Gloucester in the Hunter Valley. The proposed mine's estimated contribution to climate change was one of the key reasons given for refusal of the application. This decision has been described as a "landmark" decision and that "could further tighten the screws on the coal industry".
The case is the result of an appeal by the mining company, Gloucester Resources Limited (GRL), against the refusal by the NSW Planning Assessment Commission (PAC) in 2017 of an application for a coal mine to be established at Rocky Hill in the Gloucester Valley of NSW. The proposed mine was an open cut coal mine, which was estimated to produce 21 million tonnes of coal over a 16 year period.
The issue relating to the impacts of the mine on climate change were only raised on appeal, by community group Groundswell Gloucester Inc, which was only permitted to intervene in the process at that stage. The original PAC’s refusal of GRL’s application was based on planning grounds and had not included the issue of the impact of climate change.
In general, Chief Justice Preston concluded that the mine should be refused due to its significant and unacceptable planning and visual and social impacts, which "cannot be satisfactorily mitigated". This argument was the principal reasoning used for refusal, while avoiding greenhouse gas emissions and their likely contribution to adverse impacts of climate change added a further reason for refusal of the mine.
Chief Justice Preston examined the evidence of climate change before the court, and, in doing so, considered both national and international and decisions, international agreements and Australian climate policies before rejecting a series of arguments by GRL [see judgment paragraph 422]. The third argument rejected by Chief Justice Preston relating to "market substitution" has particular significance for other litigation against Australian coal mines, particularly in Queensland. Chief Justice Preston states at paragraph  :
The point of GRL's argument being that there will therefore, be at least the same amount of green house gas emissions, namely, coming from those other mines rather than from the Rocky Hill mine.
At paragraph  Chief Justice Preston indicates that the market substitution argument is flawed because there is no certainty that substitution will actually happen:
At paragraphs ,  ,  Chief Justice Preston points out that contrary to the market substitution argument there is the high possibility that by refusing climate affecting projects, developed countries like Australia may actually set a lead that steers countries like India and Indonesia away from green house emitting projects.
In paragraph  Chief Justice Preston points out that the market substitution assumption was rejected by the US Court of Appeal in WildEarth Guardians v US Bureau of Land Management 870 F 3d 1222 (10th Cir, 2017) - saying at paragraph  that the US Court of Appeals concluded that “the assumption itself is irrational (that is, contrary to basic supply and demand principles” and observing that “it was an abuse of discretion to rely on an economic assumption, which contradicted basic economic principles, as the basis for distinguishing between the no action alternative and the preferred alternative” (see paragraphs 1237-1238 of that judgment).
In paragraph  Chief Justice Preston refers to a very important logical flaw in the market substitution assumption, that being:
The Australian Financial Review reports that Baker & McKenzie's global head of climate law, Martin Wilder, has said that:
The ABC News reports that the decision potentially opens up a new chapter in Australia's climate litigation history, saying:
According to the Environmental Law Australia website the prospects of an appeal or revised application are high and GRL will almost certainly appeal against this decision but the decision is so learned and well written that it is very likely to survive the appeal. Environmental Law Australia also notes that GRL can also lodge a revised application and re-start the application process for a slightly different mine on the same location.
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Landmark Rocky Hill ruling could pave the way for more courts to choose climate over coal (Justine Bell-James, Senior Lecturer, The University of Queensland,and 12 Feb 2019)
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