Overview
The High Court in London has declared that the UK's Net Zero Strategy ('NZS') of October 2021 is not in full compliance with the requirements set down in the Climate Change Act 2008, and has ordered the Secretary of State for Business, Energy and Industrial Strategy to present a fresh report to Parliament by March 2023. The case demonstrates that the UK's Climate Change Act 2008 has sufficient 'teeth' to hold the government to account, and compels the government to provide the detail of how it will reach its carbon budgets on the path to meet the legally binding obligation to achieve net zero greenhouse gas emissions by 2050.
The case is of relevance to all those operating in the UK, as the proposals and policies contained in the NZS will dictate the pace of the UK's transition to net zero by 2050, which will affect every part of the UK's economy. The top-down pressure, enforced through the Climate Change Act 2008, will work its way through to business and wider society as those proposals and policies are implemented.
The Climate Change Act 2008 imposes a legal obligation to achieve net zero by 2050, and ensures action by mandating that the government sets a series of carbon budgets for 5-year periods along with proposals and policies to achieve those budgets. The sixth carbon budget, for the period 2033-2037, took effect on 21 June 2021. The Climate Change Act 2008 places a duty of the Secretary of State to ensure that proposals and policies are in place to meet those budgets (section 13), and 'as soon as reasonably practicable' after the carbon budget is set, to report to UK Parliament on those proposals and policies (section 14). The Secretary of State sought to fulfil this obligation through the NZS, laid before Parliament on 19 October 2021, shortly before the UK hosted COP26.
The legal challenge was brought by three NGOs: Friends of the Earth, ClientEarth and the Good Law Project. The claimants acknowledged that in many ways the NZS was commendable, and made it clear that they were not asking the Court to quash the NZS. However, they claimed that the Secretary of State had not discharged his duties in full, and so they sought orders for the NZS to be revised and reissued.
In particular, the claimants argued that the quantitative estimates of the impact of the proposals and policies only counted for 95% of the budget being achieved, with the remaining 5% reductions being achieved through a qualitative assessment of the impact of the policies. While much work may well have taken place within the government department, the Secretary of State was not personally briefed on the detail of the quantitative contribution of each individual policy, or which policies were anticipated to make up the 5% on a qualitative basis. Such detail was also missing from the report to Parliament, which did not reveal that there was a 5% shortfall on the numerical estimates. This, argued the claimants, meant that the Secretary of State could not discharge his duty to ensure the proposals and policies would achieve the targets, and the absence of transparency undermined and impeded both the role of Parliament in scrutinizing the NZS, and the involvement of the public.
The High Court agreed, holding that the Secretary of State was under a legal obligation to understand the quantitative effects of individual policies and, where a qualitative analysis was deployed, to understand exactly which policies were relied upon to make up the shortfall, and how. This information should also have been included in the report to Parliament.
The Court ordered the Secretary of State to lay a fresh report before Parliament no later than the end of March 2023. Businesses involved in the UK economy should watch these developments, to see how the proposals and policies will affect their sectors and industries.
Steptoe has significant experience in UK environment and climate change law including advising on carbon reporting and disclosure obligations, representation in emissions trading scheme cases and challenges, and supporting clients on carbon reduction projects.
For more information please contact Simon Tilling.