5 April ARELJ Article- Market Substitution, Climate Change and Coal Royalty Revenue in Queensland and NSW: Filling the Void April 5, 2023 By Sally Parker ARELJ, Environment, Mining, Resources and Energy ARELJ, ClimateChange, MSA 0 Dr Jonathan Fulcher and Ms Erin O’Shaughnessy Dr Jonathan Fulcher is a partner at HopgoodGanim Lawyers in Brisbane, where Ms O’Shaughnessy is a graduate lawyer. Until very recently the Queensland Land Court has repeatedly applied the market substitution argument (MSA) in a series of cases approving coal mine proposals. The argument posits: “if we don’t mine it, someone else will”. Outside Queensland, however, the MSA has been challenged in both domestic and international jurisdictions with New South Wales (NSW) and United States (US) courts rejecting the argument. Further, as global consensus towards net zero emissions grows and renewable energy sources become more viable and cost effective, a defence reliant on the demand-driven nature of coal markets is increasingly open to criticism. First, this paper seeks to answer the question: why have there been such different results in these cases, particularly between Queensland and NSW? Second, the paper suggests that approving coal projects in both States is ultimately a matter for the relevant Minister in each jurisdiction. Ministers are the guardians of the public purse, and royalties and indirect economic benefits from coal provide a significant amount of money to consolidated revenue in each State (not to mention income tax to the Commonwealth). Last, the paper considers the arguments that justify coal as part of the energy mix. It may be a paradox, perhaps, but the justification for continued coal mining has a moral as well as a fiscal dimension, a dimension not often discussed, but it may be one of the reasons coal remains a vital part of our energy mix. When considering the fiscal dimension, the problem for State Governments is that climate change cannot now be ignored. In addressing our future energy mix and phasing coal out, the replacement of coal royalties and more general economic benefits from coal mining with newer revenue streams might instead be the great moral and political challenge of our time. This paper encourages public debate regarding the balance between the economic and environmental impacts of coal mining. It is ultimately a debate about the equity to be assessed between the welfare of this generation and ensuing generations. With the latest decision of the Queensland Land Court in Waratah Coal Pty Ltd v Youth Verdict Ltd & Ors (No 6) (Waratah), the weighing up of this balance has been brought into even sharper relief. Member Login Required to Access Article Read More Related Articles ARELJ Article- Activist Shareholders and Climate Change: Australian Developments Climate change action is being driven by business and industry While everyone’s focus in recent months has been on the COVID-19 pandemic, climate change was top of everyone’s mind when the year began with bushfires ravaging Australia. The pandemic has seen individuals and organisations assess their ideologies and perspectives on a range of topics, climate change being one of them. It now seems that climate change is back on everyone’s agenda and none more so than business and industry. SHARMA v MINISTER FOR THE ENVIRONMENT More than a year on from the overturning of Sharma v Minister for the Environment by the Full Federal Court, Justice Bromberg’s original judgment continues to occupy the minds of the Australian legal community. Although the current position in Australia is that the Minister owes no duty of care in such cases, the Full Court of the Federal Court of Australia stressed that the expert evidence regarding the threat of climate change and global warming was largely uncontested, perhaps foreshadowing the cornerstone of cases to come. Globally, climate litigation is showing no signs of slowing down. As outlined below, despite numerous defeats in various jurisdictions, climate litigants have secured a small number of hard-won victories, fuelling the pipeline. ARELJ Recent Development - Industrial Manslaughter in the Queensland Resources Sector China’s cut to coal imports In October, China’s coal imports dropped by 47% compared to the same period last year. This equates to almost 12 million tonnes in one month and was a result of escalating trade tensions between Australia and China. ARELJ Case Note - Implications of New Provisions in the Human Rights Act Following Waratah Coal Decision Showing 0 Comment Comments are closed.