Concerns over climate change stalemate court decision on UK financial support to Mozambique

1 April 2022 · Carmel Rickard

A major decision by a senior UK court has split down the middle on whether that country should be financially backing a massive liquefied natural gas discovery in Mozambique. The case revolved around environmental questions and the climate change undertakings reached in terms of the 2015 Paris agreement. The Mozambique gas field is exceptionally rich and has the potential to catapult that country onto the list of the top five global suppliers of a growing international demand.

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The plan that has been approved is for the UK government to invest more than $1billion in the massive offshore gas project scheduled for Mozambique’s Rovuma Basin. It is said that this is one of the largest single financing packages ever offered by the UK government to a foreign fossil fuel project.

It would be joining a number of other countries in offering support, but it was always clear to the UK government that the project would go ahead with or without UK money.

Despite concerns based on questions of environmental law, domestic and international, raised by senior members of government, the project was ultimately approved. And at that point, representatives of Friends of the Earth (FoE) challenged the decision, saying that it infringed the UK’s undertakings made as part of the 2015 Paris agreement on ways to mitigate climate change.

Riches

Clearly, the project holds out promise of riches that would be difficult for Mozambique, one of the poorest countries in Africa, to resist. However, it is expected that about five percent of the gas would be used in Mozambique and that the balance would be exported, thus affected the carbon budgets of the recipient countries as well as Mozambique.

According to a project information memorandum, this is one of the largest gas discoveries in the world over the last 15 years. It represents a ‘game changer’ for the liquid gas market ‘and has the potential to propel Mozambique to one of the top five global suppliers and allow it to meet a growing global demand.’ Mozambique’s geographical location was further said to provide ‘easy access’ for the gas to the key growth markets of the world including Asia and Europe.

But the question for Friends of the Earth was whether the UK ought to be helping fund such a project in the first place. That’s because of the acknowledged impact that the project would inevitably have on greenhouse emissions. Instead, they said, the UK should be spending money on supporting projects that represented alternative ‘clean’ energy sources.

Error

In its challenge, Friends of the Earth said that the decision was based on ‘an error of law’, namely that the decision to fund the project ‘was compatible with the UK’s commitments under the Paris climate change agreement and/or that it assisted Mozambique to achieve its commitments under the Paris agreement.’

The final decision to approve the funding had proved difficult even within government as the ‘foreign secretary, the secretary of state for international development and the secretary of state for business all opposed funding the project on climate change grounds.’

However, the court stressed, it was not concerned with the merits of the decision; its only concern was with whether the decision was lawful.

Reasonable

In his decision, Judge Jeremy Stuart-Smith said this was the first time that climate change had been considered in the context of a long-term foreign project and that there was, at the time, no recognised way of making such a decision.

There was ‘room for reasonable experts to disagree’ and that when a court undertook judicial review, as here, its role was not to resolve ‘conflicts in expert evidence’.

In his view, enough research and consideration had been given to the project and the resulting decision had been a reasonable one, given the information available at the time.

Temperature

He said it was always recognised that the greenhouse gas emissions resulting from the project would be ‘at least, “significant”,’ and he added that it was difficult to understand what the Paris agreement meant when the world was so far off meeting the targets set ‘that no country’s reductions could or would enable the temperature goals to be met.’

His judgment, finding final approval of the project ‘reasonable’, was contradicted by a second judgment, written by his colleague Judge Justine Thornton.

In her decision, Judge Thornton noted that several of the decision-makers approved backing for the project based on incomplete or inaccurate information. She said when they took the decision to approve the funding they were ‘not made aware of the scale of the gross global emissions’.

Emissions

She said that, in the circumstances of this case, the government ‘failed to make reasonable and legally adequate enquiries in relation to a key consideration in the decision making.”

The resulting lack of information ‘deprived Ministers of a legally adequate understanding of the scale of the emissions from the project.’

She added, ‘I emphasise that my conclusions do not, and are not intended to, address the merits of the project or the other public interest considerations in play in the decision making. These are not matters for the court. Judicial review is not and should not be regarded as, politics by another means.

‘Where however, a court reaches the view that a decision-maker has erred as a matter of law in the approach taken to its assessment of the merits, it is the role of the court to say so.’

Next?

What happens next? Because it did not win a majority decision from the court, Friends of the Earth technically lost their case, but the two judges have given leave to appeal, and Friends of the Earth said that it was ‘inevitable’ that they would do so.

Carmel Rickard

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