Businesses will be protected from civil liability claims over their “greenhouse gas emissions” after legislation designed to prevent the courts from effectively creating a parallel climate regime passed its final reading in Parliament.
The Government has amended the Climate Change Response Act 2002 to prevent findings of liability in tort for alleged climate-related damage caused by “greenhouse gas emissions”. The protection will apply to both existing and future court proceedings.
Justice Minister Paul Goldsmith said the change was necessary because ongoing High Court litigation against six major businesses threatened to produce climate obligations beyond those already imposed by Parliament.
The case has raised the prospect of individual companies being held legally responsible for their contribution to an inherently global phenomenon involving emissions produced by billions of people, businesses and governments.
Goldsmith said allowing such claims to develop through the courts risked creating uncertainty for businesses and discouraging investment.
“The courts are not the right place to resolve claims of harm from climate change, and tort law is not well-suited to respond to a problem like climate change which involves a range of complex environmental, economic and social factors,” he said.
Instead, decisions about emissions policy and the economic costs attached to it will remain with elected governments and Parliament.
New Zealand already operates an extensive statutory climate framework under the Climate Change Response Act and the Emissions Trading Scheme (ETS), which places obligations and costs on businesses responsible for “covered emissions”.
Goldsmith said climate policy should be determined nationally rather than through “piece-meal litigation in the courts”.
The amendment does not remove existing statutory climate obligations. Companies covered by the ETS will still have to comply with its requirements, while the Government remains bound by its responsibilities under the Climate Change Response Act.
The practical effect is to draw a line between climate policy and private tort litigation, preventing businesses from facing an additional layer of potentially costly climate-related liability created through individual court cases.
Goldsmith said greater certainty in the law was important for business confidence, overseas investment and economic growth.
Image credit: Marc Wieland
