Ground 6
118 This attacks the Minister's reasoning as irrational as a legal constraint on the lawful exercise of statutory power. The focus is the no net increase conclusion and reasons. Put at its highest, the contention is that the Minister's conclusion essentially turned on "speculation, guesswork or assumptions formed by reference to material incapable of supporting those assumptions". The ground provides:
The finding was affected by irrationality, in that the Minister's reasoning involved illogic, or was insupportable, on the material before her or otherwise: ADJR Act, s 5(1)(f), (h); Judiciary Act, s 39B.
(1) The Minister reasoned as follows. The irrationality arises from the final step (e).
(a) Premise. Climate change caused by the total accretion of greenhouse gas emissions, before it stops increasing, from sources including (in a universe where it is taken) burning of coal from the Proposed Action will have a significant impact on very many MNES.
However…
(b) Premise. Whether or not the Proposed Action proceeds, the total level of accreted global greenhouse gas emissions and average temperature at which each stops increasing will be determined by a range of variables.
(c) Premise. There are therefore some future scenarios without the Proposed Action that result in total greenhouse gas emissions greater than or equal to some future scenarios with the Proposed Action.
(d) Preliminary conclusion. It is therefore not possible to say that total emissions will be higher if the Proposed Action is taken than if the Proposed Action is not taken.
(e) Final Conclusion. The significant impacts from greenhouse gas emissions including those from burning the coal from the Proposed Action are not likely significant impacts the Proposed Action is likely to have.
(Original emphasis.)
119 The applicant submits that this ground is made out based only on the material that was before the Minister but also seeks to rely on the expert evidence of Dr Gidden, which I received provisionally.
120 At the outset, it is necessary to be cautious in considering this ground so as not to impermissibly descend into the merits of the Minister's decision: Ogawa v Finance Minister [2021] FCAFC 17 at [17] where Logan, Katzmann and Jackson JJ observed with respect to legal unreasonableness:
[O]f all of the jurisdictional error grounds, none is more fraught with the possibility of impermissible transgression by the judicial branch into the constitutional remit of the executive branch than unreasonableness.
121 In my view that statement applies equally to the irrationality review ground, and it is not necessary in these proceedings to resolve whether irrationality is a sub-set of unreasonableness: cf Aronson M, Groves M, Weeks G, Judicial Review Administrative Action and Government Liability (7th ed, Thomson Reuters, 2022) at [5.360].
122 There are other principles which must be borne steadily in mind, primarily that the threshold to establish legal irrationality is stringent, as recently explained in King v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCAFC 152 at [53]-[55] (Anderson, Feutrill and Raper JJ). I particularly emphasise [55], commencing with the reference to the reasons of Crennan and Bell JJ in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 (SZMDS):
'Whilst there may be varieties of illogicality and irrationality, a decision will not be illogical or irrational if there is room for a logical or rational person to reach the same conclusion on the material before the decision maker. A decision might be said to be illogical or irrational if only one conclusion is open on the evidence, and the decision maker does not come to that conclusion, or if the decision is one to which the decision maker came was simply not open on the evidence or there is no logical connection between the evidence and the inferences or conclusions drawn.': SZMDS at [135]; DAO16 v Minister for Immigration and Border Protection [2018] FCAFC 2; (2018) 258 FCR 175 at [30(4)]. However, 'to establish jurisdictional error based on illogical or irrational findings of fact or reasoning, "extreme" illogicality must be demonstrated "measured against the standard that it is not enough for the question of fact to be one on which reasonable minds may come to different conclusions"': DAO16 at [30(5)] (and the authorities cited therein).
123 See also the summary of the general principles in BNGP v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 111 at [45]-[50] (Perry J, Bromwich and Kennett JJ agreeing) and Minister for Immigration and Border Protection v Sabharwal [2018] FCAFC 160 at [45] (Perram, Murphy and Lee JJ).
124 I mention two further matters. One, it is necessary to undertake a detailed factual analysis: Minister for Immigration and Border Protection v SZFW [2018] HCA 30; 264 CLR 541 at [84] (Nettle and Gordon JJ). The other, as Allsop CJ explained in Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11; 237 FCR 1 (Stretton) at [2]: "The proper elucidation and explanation of the concepts of jurisdictional error and legal unreasonableness does not depend on definitional formulae or on one verbal description rather than another." Although his Honour was concerned with legal unreasonableness, reasoning which is illogical or irrational founds a conclusion "that the decision-maker has been unreasonable in a legal sense" (Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [72] (Hayne, Kiefel and Bell JJ)), which Allsop CJ noted at [10] and then continued at [11]:
The boundaries of power may be difficult to define. The evaluation of whether a decision was made within those boundaries is conducted by reference to the relevant statute, its terms, scope and purpose, such of the values to which I have referred as are relevant and any other values explicit or implicit in the statute. The weight and relevance of any relevant values will be approached by reference to the statutory source of the power in question. The task is not definitional, but one of characterisation: the decision is to be evaluated, and a conclusion reached as to whether it has the character of being unreasonable, in sufficiently lacking rational foundation, or an evident or intelligible justification, or in being plainly unjust, arbitrary, capricious, or lacking common sense having regard to the terms, scope and purpose of the statutory source of the power, such that it cannot be said to be within the range of possible lawful outcomes as an exercise of that power. The descriptions of the lack of quality used above are not exhaustive or definitional, they are explanations or explications of legal unreasonableness, of going beyond the source of power.
125 Each of Griffiths J (at [87]) and Wigney J (at [90]), agreed with the analysis of Allsop CJ.
126 Against that general background, I turn to the applicant's arguments. The Minister is repeatedly criticised for engaging in "probabilistic reason", which I understand to be a reference to probability reasoning as subject to or involving chance, variations, or uncertainty. In the written case the submission is framed as:
At the heart of this ground is the Minister's use of scenarios, about which probabilistic reasoning was not rationally possible due to the sheer volume of complex interconnected variables on a global scale over decades, to make probabilistic judgments for the purpose of applying the relevant statutory provisions. The [applicant's] position is that the material before the Minister revealed both (1) a range of feasible (and therefore really-possible) worlds, and (2) the impossibility of rationally determining, from among them, which is more or most likely than the others to occur.
(Original emphasis.)
127 Central to the applicant's complaints is the Minister's reasoning at [108]-[120], which I have summarised but which now require more detailed attention. The Minister accepted departmental advice that the likely contribution of emissions from the proposed action to a net increase in global emissions and global average temperature is subject to a number of variables: [108]. Next, the Minister addressed one variable, namely whether any emissions caused by the proposed action will be offset, mitigated, or abated ( [109]), where the Minister reasoned that other jurisdictions where prospective buyers are located may take steps to limit or reduce emissions. The Minister continued at [110]-[117]:
As set out at paragraph 70 above, the countries where it is anticipated that the coal from the proposed action will be consumed (Japan, South Korea, Malaysia, Vietnam and Australia) each have respective nationally determined contribution (NDC) under the Paris Agreement to reduce national emissions and adapt to the impacts of climate change. Under the Paris Agreement (referred to at paragraphs 74 to 79 above), each Party must submit an NDC every five years. These NDCs are required to reflect increased ambition over time. Parties may also submit new or updated NDCs at any time. The emissions generated by combusting coal (including coal from the proposed action) would be counted as scope 1 emissions in the country where combustion occurred and may be subject to mitigation actions or offsetting.
Taiwan is not a member of the United Nations and is excluded from the UNFCCC. Domestically, however, it has an Intended NDC that includes a 2030 target and has committed to net zero emissions by 2050.
The level of global GHG emissions will also likely be subject to the emissions reduction policies of power companies, and any changes to the efficiency of their power plants. The department brief included examples of changes to the emissions reduction policies of certain companies. For example, power companies in Japan have committed to being carbon-neutral by 2050 including phasing out inefficient power plants.
More broadly, I accepted the department's advice that, if the proposed action does not proceed, this will not necessarily affect the level of GHG emissions worldwide or the extent to which the world heritage values of declared World Heritage properties will be impacted by the physical effects of climate change. That will be subject to a range of other factors, including the level of emissions from sources other than the proposed action.
I considered that these factors make it very difficult to estimate the likely net increase in global GHG emissions from the proposed action's emissions and, by extension, the extent of any net increase in global average temperature and the extent to which the world heritage values of declared World Heritage properties will be impacted by the physical effects of climate change.
I considered that it is also likely that, if the proposed action does not proceed, the prospective buyers will purchase an equivalent amount of coal from a supplier other than the proponent, which would result in an equivalent amount of GHG emissions when combusted, when compared with the amount estimated for the proposed action. As stated at paragraphs 58-59 above, the proponent engaged CRU Consulting to provide modelling for seaborne thermal coal demand and supply until 2050. I noted that, if the likely alternative supplies of coal were consumed instead, the modelling predicts that an additional 9-26% CO2-e, depending on the alternative source of supply, could be emitted relative to the proposed action.
I took into account that the IEA Coal 2022 report states that in 2022, China increased its imports from Indonesia and Russia when it reduced its imports from Australia. International trade also started to reshuffle due to the decline in Russian exports from international trade sanctions. The gap left by Russian coal supplies in Europe has been largely filled by suppliers from South Africa, Colombia and other small producers such as Tanzania and Botswana. Indonesia also shifted its exports to Europe to help offset the Russian shortfall. The report noted that China and India will continue to boost their coal production to overcome supply shortages, more than offsetting the decline in Russian production due to trade sanctions. I considered it reasonable to assume that, should the proposed action not proceed, the market would respond through an increase in supply elsewhere, in circumstances where there is still anticipated demand for the coal from the proposed action.
I was not satisfied that the proposed action is likely to result in a net increase to GHG emissions or affect the extent to which the world heritage values of declared World Heritage properties will be impacted by the physical effects of climate change.
128 The Minister then addressed the applicant's submission that she could not rationally be satisfied that the same or worse impacts "will necessarily occur in scenarios without the proposed project" at [118]. At [119], the Minister noted the further submission of the applicant that:
[I]n all feasible scenarios in which the proposed action is carried out, there will very likely be physical effects of climate change on World Heritage properties, and, conversely, that feasible scenarios with lesser increases in those effects are available in the future without the proposed action.
129 The Minister did not agree, reasoning that the argument "does not address the relevant statutory question, which requires me to consider in light of new information, whether the proposed action is a substantial cause of the event or circumstance…": [120]
130 There are two parts to the irrationality contention, though they were often blended in oral argument. One is that the Minister, having identified certain variables, failed to deploy them to draw rational conclusions based on the scientific evidence about the probable level of total global greenhouse gas emissions. As put in the applicant's written case:
[T]he Minister reasoned from a premise that a thing can happen, to a conclusion based on a thing in fact happening. That is illogical or irrational. It is missing a step: that, not only can the thing happen, it will happen.
(Original emphasis.)
131 Reasoning in that way is said to be irrational because the Act requires the Minister to assume that the proposed action will be taken.
132 The second part contends irrationality in finding that the proposed action is not a substantial cause of physical effects of climate change because the Minister was not satisfied that the proposed action will cause any net increase in global greenhouse gas emissions which, on the applicant's argument:
[N]ecessarily involves probabilistic conclusions or predictions to at least a relatively high level of confidence. These findings were irrational in circumstances where the only evidence before the Minister showed that those kinds of conclusions or predictions, with that kind of confidence, simply cannot be made.
133 In oral argument, and in some detail, I was taken to several IPCC Working Group reports that were before the Minister to make good those propositions. In particular, there is the Synthesis Report, which is a report from Working Group III. At page 23, there are graphs which model scenarios required to be implemented if global warming is to be contained to between 1.5°C and 2°C, which requires deep reductions in emissions. The scenarios are modelled on the 5th to the 95th percentile. Next emphasis was placed on paragraph 3.8.22 of the report which is concerned with scenario feasibility. By reference to this material, Mr Nekvapil orally developed the submission in this way:
I don't need to take your Honour through it in detail, but the point that's there discussed is the need to assess the feasibility of scenarios, because although a scenario is not a prediction of the future, it may be possible to say, for example, if a scenario ratchets up the use of renewables too quickly to a point that it's just not feasible that can occur, it will be excluded by the IPCC Working Group III, because it's not s not a feasible scenario. And therefore, even if everything occurred in order to bring that scenario about in terms of changes in policies or human variables, it still wouldn't be possible as a technical matter.
And so that's why when we talk about a range of really possible scenarios, we're not talking about, for example, coal stopping tomorrow, because there are a range of feasible scenarios which end at 1.4 or 1.5 - I mean which start at 1.4 or 1.5 degrees, which below that it's just not feasible because there's a, sort of, momentum in the system.
134 Later in oral argument, when I expressed concern that I should not undertake a merits review, Mr Nekvapil refined the applicant's contention and the relevant exchange was:
MR NEKVAPIL: Can I - I will try and put the point very simply like this: is that this is an attempt to, by the global scientific community, to work out what futures are possible and where the global scientific community, through this material, has disclosed that this is the possible range of futures, it's covered the field of rationality in the sense that it is no longer rational when the global scientific community has made that effort and produced this spread of likely scenarios between which there cannot be probabilistic relativities, it's no longer rational to say, "I think it's that one." It just - so it's not that that's a scientific endeavour over there and I'm a Minister administering something over here, it's just - - -
HIS HONOUR: But your request had to satisfy the Minister that there was substantial new information that there was likely to be adverse impacts on matters of national environmental significance.
MR NEKVAPIL: Yes.
HIS HONOUR: So I hesitate to use the word "onus" in this sort of proceeding, but I will use it just make clear what - the Minister then had to form a judgment about likelihood under the Act, and that's the test: has, will have or is likely to have.
MR NEKVAPIL: Yes.
HIS HONOUR: So the Minister had to do the best she could on the material available.
MR NEKVAPIL: I accept that. What she had to do, in our submission - and I will come to this in a moment by way of reply to what my learned friend, Mr Emmett said about Tarkine - what she had to do was to decide on the statutory text what were the likely events or circumstances, either directly consequential or, if indirectly consequential, for which this would be a substantial cause in a likelihood sense.
135 By reference to the expert evidence of Dr Gidden, Mr Nekvapil formulates six propositions which the applicant contends make good this ground. They are (omitting cross referencing to the transcript and the report):
Proposition 1. The Minister's reasoning process was irrational because it made a probabilistic finding as to the future with the mine and a future without the mine, whereas there was only a spectrum of really-possible futures in which the action is taken, and a spectrum of really-possible futures in which the action is not taken, with no way of rationally determining which scenario on either spectrum is more or less likely to occur than any other.
Proposition 2. It is not possible, as a matter of climate science to rule out the real possibility of a less-harmful future without the coal mine than with it.
Proposition 3. The spectrum of really-possible futures with the coal mine was shorter than the spectrum without the coal mine, because the one difference is that the future with the coal mine must contain the combustion of the 534 Mt of coal, at 21Mtpa out to 2048, such that there is a range of possible futures (in which total emissions and global average temperature rise are lower before net zero) without the coal mine that cannot exist in futures with it.
Proposition 4. The global scientific community has modelled scenarios of possible climate futures; the range of really-possible or feasible scenarios starts with C1 scenarios, and ends with C8 scenarios.
Proposition 5. the CRU scenario is roughly a C6 scenario.
Proposition 6. the NZE scenario is a C1 scenario, in which a new coal mine extension providing 21 Mtpa of coal out to 2048 cannot exist, which has been vetted to the IPCC WGIII requirements.
136 In those propositions, CRU is a reference to a report provided to the Minister by the proponent from CRU Consulting which is a modelled Coal Market Substitution Study (CRU Report), C1 is from the Synthesis Report and represents the outcome of 97 scenarios that world temperature will reach or exceed 1.5°C warming during the 21st century with a likelihood of less than or equal to 67% and limiting warming to 1.5°C in 2100 with a likelihood of greater than 50% and C8 is a worst case outcome of 29 modelled scenarios that exceed warming of 4°C during the 21st century with a likelihood of 50% or greater. A 4°C average global warming is likely to have catastrophic climate change consequences. The NZE is a reference to the International Energy Agency's Net Zero by 2050 Scenario.
137 Mr Emmett maintains objection to the admission of Dr Gidden's evidence and in any event submits that propositions 1, 2, 3 and 6 are not made out in accordance with it when one pays careful attention to the questions posed for his opinion. He accepts that propositions 4 and 5 are founded in the evidence of Dr Gidden, save for the gloss "really possible" in 4, and 5 is in any event irrelevant. Mr Lloyd does not distinctly engage with this evidence.
138 I need not resolve whether the applicant's six propositions are made out either on the material that was before the Minister or as now sought to be supplemented by the evidence of Dr Gidden. That is because the Minister did not doubt the science of climate change, the causal relationship between the emission of carbon dioxide, the warming of the atmosphere of the Earth and the range of likely impacts on MNES as a result of anthropogenic climate change. Nor did the Minister doubt that the combustion of coal is a significant contributor to total global CO2 emissions. All of that is clear from the Minister's reasons at [14]-[23], when the Minister summarised some of the material contained in the request without disputing the conclusions there identified, at [24] where the Minister noted departmental comment from SOE 2021 and at [96]-[99] where the Minister accepted that the request contained substantial new information which identified that climate change and its effects had affected and will affect MNES. Further, one cannot in this proceeding doubt the integrity of analysis or the conclusions of the various IPCC reports that were before the Minister, nor the credibility of the expert evidence of Dr Gidden, as the second respondent withdrew its notice that he be present for cross-examination.
139 However, in this proceeding acceptance of those matters does not assist the applicant's case for several reasons.
140 First, a central feature of the argument in support of this ground is that the Minister did not reason in accordance with the applicant's framework and by reference to the extensive evidence that it relied on before the Minister and which it now seeks to rely on in this proceeding. As I have explained in addressing ground 1, the statutory scheme did not require the Minister to reason conformably with the applicant's contentions. Nor did it prohibit the Minister from reasoning in the manner that she did.
141 Secondly, the Minister did not proceed by rejecting the substance of the scientific material referenced in the request that predicting the likely future course of events turns on a very large number of variables and is uncertain. Rather, the Minister accepted at [113], in accordance with her departmental advice, that there is a range of factors, including the level of emissions from other sources, that affect the total level of CO2 in the atmosphere. The Minister then reasoned at [114]-[116] that the variables "make it very difficult to estimate the likely net increase" in global greenhouse gas emissions from the proposed action because, inter alia, she found it likely that if the proposed action does not proceed that prospective purchasers will acquire equivalent amounts of coal from other sources and concluded that she was "not satisfied" that the proposed action "is likely to result in a net increase" or " the extent to which the world heritage values of declared World Heritage properties will be impacted by the physical effects of climate change": [117]. To an extent, the applicant's arguments misunderstand this aspect of the Minister's reasons by attributing to her that she ignored the range of variables or was not satisfied of their existence or effect.
142 Thirdly, the IPCC reports and the evidence of Dr Gidden do not, self-evidently, address the statutory question that the Minister was required to be satisfied about pursuant to s 78. The Minister was obliged to consider the likely impacts of the action on each MNES in issue which necessarily required her to make findings about cause and effect conformably with the indirect impact requirement of s 527E. The large body of scientific opinion is not concerned with that question.
143 Fourthly, this ground is an invitation to engage in a detailed factual analysis on the merits of the Minister's reasoning and conclusions. The basal complaint is that the Minister adopted a reasoning pathway that the applicant disputes, indeed strongly disapproves. That is not a basis for concluding that the applicant has made out a case of illogical or irrational reasoning or conclusions. The material that the Minister relied on, including the CRU report, the Coal 2022 Report and the advice from her department evidences that there was a rational basis for the Minister's findings and not that only one conclusion, contrary to that of the Minister, was open: King at [55]. See also SZMDS at [131] (Crennan and Bell JJ) and Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611 at [40] (Gleeson CJ and McHugh J).
144 The Minister's no net increase reasons are intelligible and explained. They are not lacking in commonsense, particularly once it is accepted that the statutory scheme, as I have explained, did not require the Minister to reason in a particular way but did require her to undertake an evaluative assessment to reach the state of satisfaction required by s 78(1)(a).
145 Fifthly, the Minister did not engage in the probability reasoning that the applicant criticises. What is clear from the reasons at [113] and [117] is that the Minister was not satisfied on the material that the proposed action is likely to contribute to a net increase in total global greenhouse gas emissions or affect the values of the declared World Heritage properties because there are many variables, including but not limited to those she identified at [109]-[116].
146 Sixthly, the Minister did not "fail to deploy" the identified variables, which misunderstands the Minister's reasons. Rather, the Minister found that the variables made it "very difficult" for her to estimate the likely net increase if the proposed action takes place: [114]. That reasoning discloses the variables relied on by reference to material that was available to the Minister, and which cannot be characterised as lacking common sense to produce an arbitrary or capricious outcome: Stretton at [11] (Allsop CJ).
147 Finally, the Minister based her conclusion at [117] that she was not satisfied that the proposed action is likely to result in a net increase, on her consideration of some of the many variables and did not, contrary to the applicant's arguments, base it on the "fatalist premise" that the world is "doomed to burn at least enough coal into the future that there will be a market to support this mine" because as each new mine is opened or extended the market volume increases. The error in that submission is that this embraces the applicant's preferred approach but fails to demonstrate why the Minister's reasoning by reference to the international market for coal, is lacking in an evident or intelligible justification.
148 It follows that I have concluded that the evidence of Dr Gidden is not probative on this ground and will not be received. In any event, for all these reasons, this ground is not made out.