Ch 5. US Environmental trends –
Australian law and policy
Introductory articles on emerging exposures, risk mitigation
and insurance risk transfer for clients of Omnisure.
A compendium of introductory ESG articles on emerging exposures, risk mitigation and
insurance risk transfer for clients of Omnisure with claims examples.
Martin Birch – March 2022
Chapter 5 – US Environmental trends – Australian law and policy
There is no going back on ESG – Unlike some regulatory changes, the introduction of ESG data into financial reports will likely make a lasting impact on how business gets done because these signals from regulators respond to a deeper truth about what matters to the world today. Climate change litigation has evolved dramatically with the emergence of significant court judgments from the Federal Court of Australia, the Hague District Court, Netherlands as well as United State of America. Some of US President Biden’s very first executive orders according to Corrs Chambers Westgarth (“CCW”) lawyers, set out the overarching climate change and environmental policy of the Biden Administration. You can read the full original article on this topic by Corrs Chambers Westgarth Lawyers here.1
In this respect, there are currently five key US environmental justice trends according to CCW, that will have relevance to Australian law and policy in the future and, in many respects, already are:
- Scientific evidence: an emphasis on consideration of scientific evidence in policy development and decision-making;
- Commitment to international obligations: acommitment to international treaty obligations and climate considerations infiltrating all parts of law and policy;
- Environmental justice: emerging environmental justice considerations in decision making which links public health, social costs and climate change;
- Federal environmental regulation: afocus on federal environmental regulation, as opposed to regulation at a state level; and
- Clean energy: theemergence of development of clean energy infrastructure as a key federal policy objective.
You can read more about the evolving position in the United States and how this may have implications for Australia in our Foundation Document2.
Emphasis on scientific evidence
The terms of President Biden’s Executive Order on ‘Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis’, quoted earlier, placed a clear emphasis on the consideration of robust scientific evidence as an integral component of environmental decision-making and policy development. Read more on this topic in our Foundation Document.
Renewed commitment to international treaty obligations
President Biden’s executive actions have been accompanied by a shift in the political discourse surrounding climate change. President Biden’s Executive Orders reframe climate change as a ‘climate crisis’ accompanied by “profound public health and economic crises” which require immediate action. In his recent speech on climate leadership, Secretary of State Blinken stated the current global conditions mean “taking into account how every bilateral and multilateral engagement – every policy decision – will impact our goal of putting the world on a safer and more sustainable path. It also means ensuring our diplomats have the training and skills necessary to elevate climate in our relationships around the globe”.
Environmental justice: linking public health and climate
According to CCW Lawyers, President Biden’s Executive Orders on climate forms a foundation of the environmental justice movement in the US and seeks to acknowledge that climate change has direct public health implications for both present and future generations. The EPA has defined environmental justice in the American legal context as “the fair treatment and meaningful involvement of all people regardless of race, colour, national origin, or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies”. Climate action has been framed as essential from a human rights and ‘right to health’ perspective, a position supported by judicial commentary in decisions such as Aji P. v. Washington.
Such developments are already somewhat mirrored in Australia, with the Federal Court’s recent determination that the Commonwealth Minister for Environment owes a duty of care to Australian children to protect them from the long-term risks to human health and life posed by climate change. This decision was analysed in detail by CCW in a recent article as part of their Insights series..
Emerging federal model of regulation
Environmental justice action and environmental regulation has previously primarily occurred in America at a State level. However, President Biden has recently taken action to create a White House Office of Climate Policy charged with developing and leading an ‘all of government’ approach to climate change. Alongside the creation of the President’s Special Envoy for Climate Change, this suggests that these two new offices, in conjunction with the EPA and Department of Justice, will go on to play key regulatory roles. The question arises as to whether the EPA will remain the key regulator and administrator of climate policy in this space, or whether a new model will emerge.
Focus on development of clean energy infrastructure
President Biden announced a new set of Paris Agreement nationally determined contributions (NDCs) for the United States at the Leaders’ Summit on Climate Change, including the achievement of a carbon pollution free power sector by 2035 and net-zero by 2050. Immediate action has been taken by President Biden towards the development of clean energy infrastructure. The traction these executive actions according to CCW Lawyers, has been questioned by the American Bar Association in light of the clash between the policy position of the Biden Administration and the Supreme Court. You can read more in our Foundation Document about how steps taken by the EPA on climate issues that occur “without the backing of new legislative action will undoubtedly be met with legal challenges… leaving its fate to the courts”.
Overall, there has been a seismic shift in American climate change and environmental policy which is likely to have significant implications for Australia. These implications may not be immediate, however given the Net Zero commitments made by President Biden and the whole-of-government approach to climate change, the pressure on Australian legislators and policy makers is likely to grow. The outcomes of COP26 will no doubt amplify this pressure.
1 Camenzuli, L. Covington, C. Green, J. 2021. Article by Corrs Chambers Westgarth Lawyers at https://www.corrs.com.au. ‘How emerging US environmental trends and initiatives may impact Australian law and policy’.
2 Our Foundation Document is the original full text version of “ESG Discussions – Introductory articles on emerging exposures, risk mitigation & insurance risk transfer” for clients of Omnisure, compiled by Martin Birch. Register on our website for a full copy
Please contact Martin Birch for a copy of the full-text Foundation Document at martin.birch@omnisure.com.au
