Judicial review against Minister for Climate Change following failed ETS auction
Today Lawyers for Climate Action NZ Inc filed High Court proceedings seeking judicial review of the Climate Change (Auctions, Limits, and Price Controls for Units) Amendment Regulations 2022.
The Emissions Trading Scheme (ETS) requires businesses in covered sectors to surrender one unit for every tonne of greenhouse gas emitted.
The ETS has an important role to play in meeting our domestic and international emissions reduction targets. In order to do this, the Climate Change Response Act 2002 requires volume and price settings to be made annually for the five years ahead. By law the settings must be in accordance with our emissions budgets, our nationally determined contribution under the Paris Agreement and the 2050 net zero target.
In December last year, Cabinet rejected the advice of the Climate Change Commission and the recommendations of the Minister of Climate Change about what the ETS volume and price settings should be. The effect of the Cabinet decision was to make available at low prices an additional 35 million units over the next five years. That is more than one year’s worth of emissions for sectors within the ETS.
LCANZI’s judicial review claims that in overriding the recommendations from the Commission and the Minister, Cabinet failed to address whether the settings were in accordance with the emissions budgets and the NDC. Instead the decision was driven by concerns that rising ETS unit prices would flow through to households. LCANZI seeks a declaration from the Court that the regulations are inconsistent with the Climate Change Response Act, and an order that the regulations be remade.
President of LCANZI, Bronwyn Carruthers KC says that “these errors need to be addressed if Aotearoa New Zealand is to meet its obligations and address climate change in a way that is just and equitable”.
“The ETS is supposed to act like a tether on our emissions. But, Cabinet signalled that whenever tension starts to go on it will throw out more rope. Unsurprisingly, the price of ETS units has collapsed following the December decision.”
“The Minister received expert advice from the Climate Change Commission which could have resulted in ETS settings that go some way to meeting our climate change obligations. Instead, regulations were weakened, moving us further away from meeting our obligations,” says Ms Carruthers.
“There is scientific consensus that limiting warming to 1.5°C is essential to avoid the worst impacts of climate change. It is also the agreed global goal under the Paris Agreement, and the purpose of the Climate Change Response Act. Every lever we have should be being exercised to its greatest extent to try to mitigate this coming humanitarian and ecological disaster. The use of these regulations to water down one of the few tools we have to lower Aoteaora New Zealand’s emissions is unacceptable and unlawful.”
Click here to view the statement of claim.
Media comment:
Dr James Every-Palmer KC (+64 275 801 616)
Bronwyn Carruthers KC (+64 21 685 809