Project developers and financiers should scrutinise existing projects that are in pre-environmental authorisation stage, and all future projects, to determine what issues need to be assessed prior to applying for authorisation.
The 8 march 2017 judgment in Earthlife Africa Johannesburg v The Minister of Environmental Affairs and others is South Africa’s first judgment relating to climate change impact. The court held that the decision to grant an environmental authorisation for the Thabametsi coal-fired power station was unlawful because information relating to the climate change impact of the project had not been adequately considered prior to the authorisation being issued. The court ordered that the environmental authorisation should be remitted to the Minister for reconsideration on the basis of the information contained in a climate change impact assessment report.
The implications of the judgment on project development in South Africa include:
- The relevant authority authorising projects in terms of the relevant legislation cannot rely on general policy instruments to excuse the lack of consideration of specific climate change impacts in relation to a project. Policy instruments (such as the Integrated Resources Plan) developed by the Department of Energy do not diminish the requirements of environmental legislation for climate change factors to be considered.
- Projects which have the potential to contribute to adverse climate change, for instance through the release of GHG emissions, must be the subject of a detailed climate change impact assessment (CCIA) as a component of the environmental impact assessment process required by law. Each project will have to be considered on its own facts to determine whether a CCIA is required. This will be done in consultation with the relevant authority and experts.
- A CCIA involves two key components. Firstly, an assessment of the contribution a project will make to climate change, which involves a quantification of the GHG emissions over the lifetime of the project. Secondly, a climate change resiliency assessment to determine whether climate change poses a risk to the project, and whether any such risks can be effectively mitigated.
- All relevant information relating to a project must be assessed before an environmental authorisation is granted. It is not adequate to make the environmental authorisation conditional upon relevant information being assessed and reported to the regulator at a later date. For example, it was not lawful to grant the environmental authorisation subject to the condition that a CCIA be undertaken prior to the project being constructed. This may have a wider impact on environmental impact assessments than just in respect of climate change, because environmental authorisations often contain similar conditions relating to biodiversity issues such as environmental offsets. Based on the judgment, the environmental authorities may require project companies to develop and provide workable plans and strategies on these issues before issuing the authorisation in future.