High Court rejects challenge to UK ETS design

Waste incineration will continue to be excluded from the UK Emission Trading Scheme (ETS), while its generous initial emissions cap will also be allowed to remain, according to a court ruling.

This is despite the Climate Change Committee (CCC) advising against adopting the scheme’s annual starting cap of 156m tonnes of CO2, considerably above the amount expected to be emitted by the sectors affected by the scheme, according to the judgment handed down yesterday.

Mr Justice Dove dismissed a challenge to the ETS’s design, brought by environmental campaigner and UNESCO special envoy Georgia Elliott-Smith, supported by solicitors Leigh Day, following a High Court hearing in April.

She considered that the initial cap of 156 million tonnes of CO2, considerably above the amount expected to be emitted by the sectors concerned, was incompatible with short and medium-term climate obligations set out in Article 4.1 of the Paris Agreement.

In response, Richard Honey QC of Francis Taylor Building, acting for the secretary of state for business, energy and industrial strategy, argued that the article’s aim was bound up closely with the agreement’s central goal of reducing greenhouse gas emissions over the long term.

However, following the Corner House judgment of 2009, the judge accepted that it was not for the court to consider the interpretation of an international treaty, considering that it had not been incorporated into domestic law, provided that it was tenable. Adopting this approach, Dove concluded that, “I am entirely satisfied that the approach to the Paris Agreement described in his submissions by Mr Honey is one which is tenable and entirely appropriate.”

“This does not deny the urgency of the need to address climate change and involves the recognition that in order to meet the long term requirements of the Paris Agreement action is required now. Taking measures in the short term is an essential part of achieving the longer term objective, and that approach is clearly tenable in the light of the provisions of article 4.1,”

He also rejected an argument that ministers had not been aware of these short-term provisions, considering that documents submitted to the courts did not make an explicit reference to them.

The second line of attack put forward by Elliott-Smith’s counsel, David Wolfe QC of Matrix Chambers, was that the new ETS was incompatible with section 44 of the Climate Change Act 2008, which sets the basic terms for such schemes. Accordingly, Whitehall and the devolved administrations had exceeded their available powers.

Specifically, as the cap was far above the anticipated volume of emissions, it would be ineffective at inducing their abatement, Wolfe argued, drawing attention to the CCC’s supporting view.

“The claimant submits that the documentation shows that considerations such as the impact on businesses were taken into account in designing the scheme before it had been established that the scheme fulfilled or was justified by the statutory purpose,” Dove wrote.

Had the decision been in line with the law, in Elliott-Smith’s consideration, then waste incineration could have been brought within the ETS’ scope. It has always been excluded from the EU ETS, though the European Commission is reconsidering its stance on the issue.

But the judge again accepted the submissions made on behalf of the secretary of state: “In my judgment a trading scheme within the definition provided by section 44 (2)(a) does not necessarily have to achieve a reduction in the activities consisting of greenhouse gas emissions or causing or contributing such emissions: it is sufficient that the design of the scheme limits or encourages the limitation of those activities.”

Nevertheless, the judge found that modelling conducted by the government showed that it would indeed deliver a reduction in emissions, and that it was inappropriate for the court to question that conclusion, especially considering that no detailed criticism had been advanced by the claimant.

Having dismissed the case, there was no need to consider submissions made by the Scottish government and Northern Ireland’s Department for Agriculture, Environment and Rural Affairs, who had both joined the case as co-defendants. They had objected to the right of the High Court of England and Wales to adjudicate on their decisions to participate in the UK-wide ETS.

A spokesperson for Leigh Day said that Elliott-Smith is considering an appeal.

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