Genesis Power Ltd v Greenpeace New Zealand Inc [2007] NZCA 569; (2007) 14 ELRNZ 1; [2008] 1 NZLR 803; [2008] NZRMA 125 (11 December 2007)

Last Updated: 5 February 2018

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA372/07
[2007] NZCA 569

BETWEEN GENESIS POWER LIMITED
Plaintiff

AND GREENPEACE NEW ZEALAND INCORPORATED
Defendant

Hearing: 11 October 2007

Court: William Young P, Chambers and Robertson JJ

Counsel: P F Majurey and T L Hovell for Plaintiff
D M Salmon and M Heard for Defendant
M E Casey QC and L S Fraser for Auckland Regional Council as Intervenors

Judgment: 11 December 2007 at 3 pm

JUDGMENT OF THE COURT

1. We declare as follows:

In considering the application by Genesis Power for a discharge permit relating to the discharge into the air of greenhouse gases associated with the proposed Rodney power station, the Auckland Regional Council must not have regard to the effects of that discharge on climate change.

2. We reserve leave to the parties to apply to us to vary the form of this declaration. We also reserve costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by William Young P)

Introduction

[1] Genesis Power Ltd has applied for a resource consent associated with a proposed gas-fired electricity generating plant at Rodney. The consent authority is the Auckland Regional Council. Greenpeace New Zealand Inc has objected on grounds which invoke climate change considerations that are addressed by s 104E of the Resource Management Act 1991 (“the Act”). That section was considered by the High Court in Greenpeace New Zealand v Northland Regional Council [2006] NZHC 1212; [2007] NZRMA 87 (“the Mighty River case”) which concerned a project proposed by Mighty River Power Ltd. The result was an interpretation which was broadly unfavourable from the point of view of Mighty River Power (and any similarly placed applicant). Mighty River Power obtained leave to appeal against the judgment (and Genesis Power leave to intervene), but the appeal was abandoned when Mighty River Power decided not to proceed with the power plant in issue.
[2] Concerned at the possible impact of the Mighty River case on the way in which the Rodney power plant application would be addressed (and in particular the factual issues which would be on the table during the resource consent process), Genesis Power sought declaratory relief in the High Court in substance challenging the result of the Mighty River case. These proceedings were transferred to this Court for hearing. In this Court, the Auckland Regional Council, which sought and obtained leave to intervene, has supported the position of Genesis Power.
[3] The case raises two questions:

• (a) Should we entertain the application for declaratory relief? And if so:
• (b) Was the Mighty River case correctly decided?

Should we entertain the application for declaratory relief?

[4] The case was heard before us on 11 October 2007. Much of the argument focussed on whether the Mighty River case was correctly decided. But as well, there was necessarily some argument addressed to whether it would be right to grant declaratory relief.
[5] On the same day as the case was argued before us, the government released its energy strategy. An element of that strategy was the conclusion that for the next ten years, there should be no need for new fossil fuel-powered baseload-generating facilities. Further, the strategy indicated that the government (including shareholding ministers) would expect state-owned power generators (such as Genesis Power) not to proceed with plans to develop such facilities. This strategy announcement, and associated political comment, seemed initially to have put an end to the Rodney power plant proposal, in effect rendering this case as moot as the Mighty River case.
[6] Since the hearing we have received a good deal of material from the parties as to the future of the Rodney power station proposal. We had hoped that we would be presented with an unequivocal decision, one way or the other, as to whether Genesis Power will be continuing with the Rodney power station application. But from the opaque nature of the material supplied by Genesis Power, we assume that such a decision has not been made. Instead, Genesis Power has asserted that:

• (a) The application for the Rodney power station has not been withdrawn and is still being processed.
• (b) The “final operational configuration” of the Rodney power station has not been determined and it could operate as a peaking rather than a baseload facility, in which case, its construction would not be inconsistent with the government’s energy strategy.
• (c) In any event, the eventual construction of the Rodney power station may well be 10 years (or more) away, and thus not in breach of the energy strategy, even if its eventual operational configuration is as a baseload facility.

[7] Since the hearing, the situation has continued to develop. On Tuesday last week, the Climate Change (Emissions Trading and Renewable Preference) Bill was introduced into Parliament. Part 2 of that bill provides a proposed statutory framework to give effect to the October policy announcements. Whether that statutory framework will be enacted (and in particular in the currently proposed form) is obviously uncertain. And in any event, even if the bill is enacted in its current form it would still leave on the table the points already made by Genesis Power (and referred to in the preceding paragraph).
[8] Greenpeace would like the opportunity to explore further the likelihood of the Rodney proposal going ahead. It points to the conflict between unequivocal assertions made by cabinet ministers to the effect that the Rodney project is off and Genesis Power’s position that it is not necessarily off. And it wishes to effect re-open the hearing to allow more discovery of recent communications between the government and Genesis Power. But the reality is that the details of the policy as announced and indeed the Bill as introduced last week do not exclude the reasonable possibility that the application will proceed. We do not see how we can go past the facts that we have been told that the application remains alive and is being processed. We have and have heard nothing direct to the contrary. So for the moment the claim before us is not moot. No doubt the current situation is fluid and there may be further developments which will put an end to the Rodney project and the associated application. But we would not see the possibility that this will happen as a basis for deferring, perhaps for many months or even longer, a decision on this case – a case which was transferred to this Court, without opposition from Greenpeace on the basis that factual inquiry would not be necessary. In those circumstances we are satisfied that the issue is not moot at the moment.
[9] The conclusion that the proceedings are not moot still leaves in issue whether we should entertain the application for declaratory relief. We would normally be reluctant to entertain an attempt to obtain, separately from a resource consent process, a ruling as to how that process should be conducted. There is an elaborate procedure provided for in the Act and, in most instances, it is best if that procedure is followed. There is, of course, every possibility that the consent process in relation to the Rodney power station will attract parties who are not before us. As well, if we give the relief sought by Genesis Power, we will necessarily not have the opinions of the Environment Court and High Court. Further, at this comparatively early stage in the resource consent process, the practical implications of the competing views of s 104E (considered below) have not been fully worked through. For instance, we do not know the extent of the evidence which Genesis Power and Greenpeace will be required to lead and the investigations which the Auckland Regional Council will have to undertake on the basis of the approach taken in the Mighty River case.
[10] Recognising these problems, we are nonetheless satisfied that we should address the application on its merits.
[11] Section 3 of the Declaratory Judgments Act 1908 states:

3 Declaratory orders on originating summons

...

Where any person claims to have acquired any right under any ... statute, ...

such person may apply to the High Court ... for a declaratory order determining any question as to the construction ... of such statute ... .

As an applicant for a resource consent, Genesis Power claims to have acquired a right under the Act to have its application dealt with on the basis of its interpretation of s 104E. So the current proceedings are within the scope of what is contemplated (at least on a literal approach) under the Declaratory Judgments Act.

[12] We see no substantial jurisprudential risks with proceeding to determine the case on the merits. The underlying issue is relatively well-defined. Importantly, the context provided by the Mighty River case and the present Rodney power station application sufficiently anchor the case in reality for it to be appropriate for us to issue a declaration. Given that Greenpeace appeared in opposition to the application assuming a role effectively identical to its role in the Mighty River case, it is a legitimate and competent contradictor.
[13] On the other hand, we can see major practical difficulties if we decline jurisdiction. At this point it is necessary to anticipate our view on the merits. As will become apparent, we are satisfied that the approach taken in the Mighty River case was wrong. Given that conclusion, it would be irresponsible to abstain from giving a ruling when the consequence might be to require Genesis Power, the Auckland Regional Council and Greenpeace (along with any other parties to the Rodney power station application) to proceed though a lengthy resource consent process (which includes the possibility of appeal to the Environment Court) on a mistaken interpretation of the Act. We recognise that in deciding whether to exercise jurisdiction by reference to the merits of the case we might be thought to have put the cart before the horse. But this case was transferred to this Court without opposition from Greenpeace and with a view to this Court giving a definitive answer. Further, it was comparatively late in the piece that Greenpeace sought to argue the jurisdiction issue. On the way in which the case was presented to us, we have necessarily had to form a view of the underlying merits at the same time as we have been required to address the jurisdictional issue.

Was the Mighty River case correctly decided?

The statutory setting

[14] The particular context in which the Genesis Power application must be considered is set by s 15 of the Act which provides:

15 Discharge of contaminants into environment

(1) No person may discharge any—

...

(c) Contaminant from any industrial or trade premises into air; ...

unless the discharge is expressly allowed by a rule in a regional plan and in any relevant proposed regional plan, a resource consent, or regulations.

(2) No person may discharge any contaminant into the air, or into or onto land, from—

(a) Any place; or

(b) Any other source, whether moveable or not,—

in a manner that contravenes a rule in a regional plan or proposed regional plan unless the discharge is expressly allowed by a resource consent, or regulations, or allowed by section 20A (certain existing lawful activities allowed).

[15] So in the absence of an authorising rule or regulation and outside the situations covered by s 20A (which is not relevant here) the discharge into the air of contaminants from any industrial or trade premises requires a resource consent. The proposed Rodney power station will discharge greenhouse gases (“GHGs”) into the air. And Genesis Power thus requires a discharge permit. The issue in this case is the extent to which the Auckland Regional Council, as the consent authority, when considering the application for this discharge permit can take into account the impact of the proposed discharge on climate change.

The policy context

[16] New Zealand’s contribution to worldwide GHG emissions is comparatively low (less than 0.3 per cent). New Zealand’s current policies, however, are based on the view that it is in the national interest to contribute to effective global action to reduce emissions. New Zealand is a party to the United Nations Framework Convention on Climate Change of 9 May 2002 and the Kyoto Protocol which was adopted on 11 December 1997. It now appears that New Zealand faces difficulties in meeting its Kyoto obligations (in particular the requirement to freeze GHG emissions at 1990 levels between 2008 and 2012).
[17] There are sound reasons why the emission of GHGs should be subject to national, and not regional, regulation and control. Regional regulation would put heavy resource demands on regional government but produce results which would not be commensurate with the effort involved. The effects of GHG emissions are not of a regional character. If regions adopt different standards, this would encourage selective behaviour, with projects being set up in regions which offered the least restrictions and with no net gain to the wider environment to which climate change is relevant. Further, given New Zealand’s comparatively low contribution to worldwide GHG emissions and the infinitesimal contribution which any particular project could make, there could be no demonstrable linkage between GHG emissions associated with any particular project and climate change generally.
[18] It is therefore understandable that since 2002, legislative policy has been for New Zealand’s response to the challenges of climate change to be organised on a national rather than a regional basis. This policy was first manifested in the Climate Change Response Act 2002 and was further implemented by amendments made to the Act by the Resource Management (Energy and Climate Change) Amendment Act 2004 (“the 2004 amendment Act”)

The key statutory provisions

[19] Under the new scheme, regulatory standards associated with the emission of GHGs are to be set nationally, see s 70B of the Act. There is a corresponding limitation on the rule making power of regional councils:

70A Application to climate change of rules relating to discharge of greenhouse gases

Despite section 68(3), when making a rule to control the discharge into air of greenhouse gases under its functions under section 30(1)(d)(iv) or (f), a regional council must not have regard to the effects of such a discharge on climate change, except to the extent that the use and development of renewable energy enables a reduction in the discharge into air of greenhouse gases, either—

(a) in absolute terms; or

(b) relative to the use and development of non-renewable energy.
[20] And s 9 of the 2004 amendment Act provides:

9 Transitional provision relating to rules made before commencement of the Act

On the commencement of this Act, an existing rule or part of a rule in a regional plan the controls the discharge into air of greenhouse gases solely for its effects on climate change is revoked.

[21] This shift from regional to national regulation is reflected in other provisions of the Act which are more germane to the present dispute, in particular:

7 Other matters

In achieving the purpose of this Act, all persons exercising functions and powers under it, in relation to managing the use, development, and protection of natural and physical resources, shall have particular regard to—

...

(i) the effects of climate change:

(j) the benefits to be derived from the use and development of renewable energy.

104E Applications relating to discharge of greenhouse gases

When considering an application for a discharge permit or coastal permit to do something that would otherwise contravene section 15 or section 15B relating to the discharge into air of greenhouse gases, a consent authority must not have regard to the effects of such a discharge on climate change, except to the extent that the use and development of renewable energy enables a reduction in the discharge into air of greenhouse gases, either—

(a) in absolute terms; or

(b) relative to the use and development of non-renewable energy.

(Emphasis added)

[22] The emphasised words in s 104E were referred to in the course of argument as “the prohibition”, with the rest of the section being described as “the exception”. It will be observed that there is a close similarity of language between ss 70A and 104E. For the purposes of this case, it is the latter section which is of principal relevance.
[23] The legislation does envisage that regional government will be involved in the implementation of national standards once they have been promulgated, see ss 70B, 104 and 104F.

The Mighty River case

[24] The case arose out of an appeal by Greenpeace against decisions of the Northland Regional Council and the Whangarei District Council granting Mighty River Power consents authorising the operation of a coal-fired electricity generation station. The notice of appeal asserted the relevance of carbon dioxide emissions associated with the station. Greenpeace wished to argue that:

• (a) The operation of the coal-fired station would in effect subsidise the New Zealand coal industry (by enabling it to avoid internalising the cost to the country and the environment of GHG emissions);
• (b) The resulting electricity would be cheaper than would otherwise be the case; and
• (c) This would put further hurdles in the way of renewable electricity generation in New Zealand (by making renewable energy less price competitive).

[25] In the Environment Court, Judge Newhook (sitting alone) struck out the relevant passages of the notice of appeal. This is what he said:

[43] It is instructive to read the Amendment Act in the round. Section 3, setting out its purpose, is obviously an important provision. Commencing with s3, particularly subsection (b)(ii), it appears that the thrust of the Amendment Act is ... to place regulation about the discharge into air of greenhouse gases firmly in the national regulatory arena, and not regional. This flavour carries right through to the final section, s9. That provision was not mentioned by counsel, and is not of direct relevance to the case, but seems to me to add weight to the argument that regulatory activity on this important topic is taken firmly away from regional government, because it provides for the revocation of any pre-existing rule in a regional plan that controls the discharge into air of greenhouse gases solely for its effects on climate change. It has the same flavour in this regard as sections 70A and 70B which were mentioned in submissions, regarding new regional rule making.

[44] Mr Currie’s argument about the meaning of s104E is at odds with the thrust of the Amendment Act. If Mr Currie was correct that it was open to the Court to consider the comparative situation between a proposal such as Marsden B and an actual or hypothetical proposal using renewable energy, the inescapable result would be that it would be considering the effects on climate change of discharges into air of greenhouse gases. Taken to its limit, if the actual or hypothetical proposal being compared emitted no such discharge, the Greenpeace argument would invite consideration by the consent authority of the entire discharge from the proposing user of non-renewable energy. Comparison of Marden B with any such alternative whether to the full extent of discharge by the former, or partial, would in my view be completely contrary to the Amendment Act.

[45] If there is ambiguity in the Amendment Act, it is permissible to seek extrinsic assistance, such as the passage from Hansard referred to in the Todd decision, to resolve it. The speech of the Associate Energy Minister makes the policy thrust of the Amendment Act very clear, by stressing the interests of removing the potential for duplication and unnecessary costs, and the potential for local controls to conflict with national objectives.

[46] Whether or not there is a need to resolve ambiguity (and I do not consider that there is), I hold that Mr Cowper is right in submitting that the purpose of s104E is to allow consideration of the effects of discharge on climate change only in the context of applications to use or develop renewable energy that will enable a lowering of greenhouse gas emissions in either absolute or relative terms. That can be relevant, for instance, when a consent authority is weighing all matters before it, faced with a proposal having adverse landscape or other effects such as was argued in the Genesis Power case previously referred to.

(Footnotes omitted)

[26] In the High Court, Williams J allowed an appeal from that decision (reported as Greenpeace New Zealand v Northland Regional Council [2006] NZHC 1212; [2007] NZRMA 87).
[27] The Judge expressed the view that the prohibition expressed in s 104E was in apparent conflict with s 7(i) (which requires those administering the Act to have regard to “the effects of climate change”). Whether there is in truth a conflict is a point to which we will return shortly. But having identified a conflict the Judge saw the solution to it in the exception. The Judge also referred to s 7(j) (which refers to the benefits to be derived from the use and development of renewable energy).
[28] The critical parts of his judgment are as follows:

[49] In light of all of that, when approaching the correct interpretation of s 104E, a prime factor for consent authorities to take into account when considering applications for discharge ... permits is that, in order to qualify under s 104E, the application must relate to the “discharge into air of greenhouse gases” and, pursuant to the exception, the authority should also take into account that a “reduction in the discharge into air of greenhouse gases” arising from the “use and development of renewable energy” is an activity which is beneficial in terms of s 7(j). It must therefore be the case that one of the factors which the consent authority is entitled to take into account in considering whether to grant discharge ... permits for activities which relate to the “discharge into air of greenhouse gases” is whether the application will result in the beneficial “reduction in the discharge into air of greenhouse gases” because the application includes the “use and development of renewable energy”. If the resource consent application for a discharge permit which otherwise qualifies under s 104E includes a proposal which, if consented to and effected, will enable a “reduction in the discharge into air of greenhouse gases” by the “use and development of renewable energy” then, in terms of s 104E, that is a factor which the consent authority can take into account in deciding whether to grant resource consent.

[50] If the application for a discharge permit which otherwise qualifies under s 104E includes no proposal which, if consented to and built, would enable a “reduction in the discharge into air of greenhouse gases” by the “use and development of renewable energy” then that, too, is a factor the consent authority is entitled to take into account in deciding whether to exercise its discretion and grant resource consent. Thus, the consent authority’s discretion to grant resource consent for discharge permits which otherwise qualify under s 104E which include a proposal which, when built, would result in “reduction in the discharge into air of greenhouse gases” by the “use and development of renewable energy” are more likely to be granted than discharge permit applications which otherwise qualify under s 104E but include no proposal incorporating those features. To that extent – and to that extent alone – the consent authority may “have regard to the effects of such a discharge on climate change” since a discharge permit application which includes features which, if consented to and built, would enable a “reduction in the discharge into the air of greenhouse gases” by the “use and development of renewable energy” will, to the extent encompassed by those features, amount to beneficial “human activity that alters the composition of the global atmosphere”.

...

[55] Put a little more shortly, resource consent applications for discharge ... permits involving the “discharge into air of greenhouse gases” which would otherwise contravene s 15 (and s 15B) are more likely, as part of the discretionary process in deciding whether to grant resource consent, to be granted such consent if they involve the “use and development of renewable energy” which will enable a “reduction in the discharge into air of greenhouse gases” because the consent authority is able to consider the “benefits to be derived from the use and development of renewable energy”. However, the fact that a discharge ... permit application which otherwise qualifies under s 104E includes no proposal for the “use and development of renewable energy” does not exempt it from being considered under s 104E. That is a discretionary factor for the consent authority to take into account in deciding whether to grant consent to the permit application and, to that limited extent, to have regard to the effects of the discharge of greenhouse gases on climate change. Section 104E and the other sections discussed therefore make it more likely that resource consent will be granted for permit applications qualifying under s 104E if they include a proposal for the “use and development of renewable energy” than if they do not. Section 104E and the other sections discussed accordingly provide a spur for permit applications qualifying under the section to include such beneficial proposals to improve their chances of consent being granted.

...

[57] It follows that the appeal must be allowed. With respect, the Environment Court fell into error. In taking the view that the thrust of the 2004 amendment was to put regulation of the discharge into air of greenhouse gases in the national arena the Court was only partially correct (para [43]). More importantly, the view in para [44] that the Greenpeace argument inviting “consideration by the consent authority of the entire discharge from the proposing user of non-renewable energy . . . with any such alternative” was contrary to the 2004 amendment. That conclusion appears to overlook the necessity in terms of s 104E for the permit application to involve the “discharge into air of greenhouse gases” and the fact that the section enables the consent authority to balance that proposed activity alongside any proposal by the applicant which would effect “reduction in the discharge into air of greenhouse gases” by an activity which involves the “use and development of renewable energy . . . relative to the use and development of non-renewable energy” and to that extent to have regard to climate change.

(Emphasis added)

[29] In the course of the hearing before us, we spent some time with counsel analysing exactly what Williams J meant. A clear message which emerges from s 104E is that, all other things being equal, an application for a discharge permit associated with the emission of GHGs and involving renewable sources of energy will likely be more favourably viewed than one which relies on non-renewable sources. This much was common ground before us. If that was all that Williams J meant, his approach was not appreciably different from that of Judge Newhook. That said, the comments made by the Judge in [55] and [57] make it clear that he disagreed with Judge Newhook. Further, the first of the italicised passages in [50] indicates that he considered that the exception was relevant in relation to proposals which do not involve renewable energy. And in any event, he eventually allowed the appeal (which in effect left in the ring the argument identified at [23]).
[30] One way of looking at the difference between the approach taken by Williams J and that contended for by Genesis Power is that on Genesis Power’s approach the exception is only engaged (and thus relevant) where a proposal actually envisages the use of renewable energy whereas Williams J contemplated that any proposal which is caught by the prohibition should be evaluated by reference to the possibility of using renewable energy (see what is suggested at the end of [57]).
[31] The corollary of treating the non-applicability of the exception as a negative factor is that the emission of GHGs itself becomes a negative factor. If this is the correct approach to the exception in s 104E, it would also have to apply to the exception to s 70A and would thus permit the making of rules which impose particular restrictions associated with the emission of GHGs.
[32] In the context of the resource consent process, the approach favoured by Williams J would appear to permit (indeed practically require) the parties to the process to address:

• (a) The possibility or practicality of developing an alternative proposal using renewable energy; and
• (b) The significance of the proposed emission of the GHGs on climate change (because, the consent authority will have to make a decision as to the extent to which the emission actually proposed will have negative effects).

Genesis Power’s complaint

[33] Genesis Power’s primary complaint is that the approach of Williams J in effect inverts what the legislature intended when it enacted s 104E. In particular:

• (a) Section 104E is part of a suite of measures intended to ensure that regulation of GHG emissions is dealt with nationally and not regionally. By giving so much emphasis to the exception in s 104E, Williams J in effect provided for regional consideration of GHG emissions.
• (b) Given the textual similarity between s 104E and s 70A, such a broad approach to the exception would facilitate a form of regional regulation of GHG emissions.
• (c) The interpretation given to the exception is inconsistent with the established pattern of Environment Court decisions prior to the 2004 amendments Act, which were very much against ad hoc regional control of GHG emissions through the resource consent process (see for instance Environmental Defence Society (Inc) v Auckland Regional Council [2002] NZEnvC 315; [2002] NZRMA 492 at [85] – [88] (EC)).

[34] Biomass or geothermal energy production involves renewable sources of energy but also produces GHG emissions, albeit at a lower rate per unit of energy than thermal methods of power generation. Genesis Power maintains that the purpose of the exception s 104E is to permit consideration of the benefits of that lower rate of GHG emissions (and the associated displacement of non-renewable energy production with higher rates of GHG emissions) on an application for a resource consent involving biomass or geothermal production.

Analysis

[35] Williams J identified what he saw as a conflict between s 7(i), dealing with “the effects of climate change”, and the prohibition in s 104E.
[36] We see no such conflict.
[37] Section 7(i) anticipates that there will be climate change and requires regional councils to take into account, in exercising their functions under the Act, the effects of climate change. We see no inconsistency between that requirement and the prohibition on regional regulation of the emission of GHGs (a process which is logically upstream of climate change, and thus the effects of climate change). That there is a difference between the relevant concepts is emphasised by s 3(b) of the 2004 amendment Act which provides:

3 Purpose

The purpose of this Act is to amend the principal Act –

...

(b) to require local authorities –

(i) to plan for the effects of climate change; but

(ii) not to consider the effects on climate change of discharges into air of greenhouse gases.

[38] Further, s 104E is not expressed to be subject to Part II (where s 7(i) appears). The prohibition therefore operates on a stand-alone basis.
[39] Another noteworthy aspect of the Mighty River judgment is its focus on power generation. But it is important to recognise that GHGs can be produced and emitted from a range of activities. Accordingly, the scope of s 104E (and s 70A) is not confined to proposals for energy generation. The approach of Williams J would not be easy to apply to applications for discharge permits for GHG emissions associated with activities which do not involve energy generation. On perhaps a literal approach to his judgment, regional councils would be required to control such activities by reference to the effects of their emissions on climate change.
[40] In our view, s 104E (and s 70A) can be fairly construed in accordance with the language used by the legislature and in the context of a clear legislative policy of nationalising New Zealand’s approach to the emission of GHGs. We also favour an interpretation of the exception in s 104E which does not in effect overwhelm the prohibition. On the broad approach to the exception adopted by Williams J, there would necessarily be the sort of duplication of effort between national and regional government which the legislature has sought to eliminate. On this basis, we construe the exception to s 104E as only applying in the case of a resource consent application which involves the use of renewable sources of energy production. In cases which are not within the exception, so construed, the prohibition applies.
[41] This means that in a case involving non-renewable energy production, there is no need for the consent authority to:

• (a) Compare the proposal advanced by the applicant with a hypothetical proposal using renewable sources.
• (b) Treat the non-use of renewable sources of energy as a negative factor counting against the grant of consent.
• (c) Assess the extent to which GHG emissions associated with the proposal would have an effect on climate change.

[42] Our conclusions necessarily mean that we reject the argument advanced by Mr Salmon for Greenpeace in which he sought to uphold the approach of Williams J in the Mighty River case. It is right, however, that we record and comment on the key features of that argument.
[43] The points on which Mr Salmon particularly relied, and our comments, are as follows:

• (a) Section 7(i) and (j) require those exercising functions under the Act to have regard to the effects of climate change and the benefits of renewable energy. Mr Salmon contended that Genesis Power’s interpretation of s 104E entails the over-looking of s 7(j) in cases concerning non-renewable energy. We disagree. A requirement to “have particular regard to ... the benefits of renewable energy” does not necessarily entail a requirement to have particular regard to the “disbenefits” in terms of climate change of non-renewable energy generation. In the particular statutory context, and for the reasons already given, we do not equate the absence of a positive factor as amounting to a negative factor. To allow proposals to provide energy from non-renewable sources to be evaluated against a general baseline that renewable energy production is better would necessarily cut right across the prohibition in s 104E.
• (b) The benefits of renewable energy are not confined to climate change issues. Mr Salmon gave examples of other possible benefits, such as less localised pollution and, in the case of biomass-based co-generation, reduction in waste management burdens. This, he said, indicated that s 7(j) would justify comparison of such benefits as against equivalent corresponding adverse effects associated with non-renewable energy production. We accept that this may be so (and for this reason propose to grant a declaration in more narrow terms than was sought by Genesis Power). But we do not see this consideration as controlling the interpretation of s 104E, the prohibition in which is directed specifically to the effect on climate change of GHG emissions.
• (c) Mr Salmon took us to the parliamentary history of the 2004 amendments. We have considered the material on which he relied but do not see it as supporting his interpretation. Indeed our view of the parliamentary material is that, as a whole, it supports the Genesis Power interpretation and in particular the view that the exception only applies when renewable energy production is under consideration.
• (d) Mr Salmon argued that the words “except to the extent” are apt to define the scope of what can be looked at without breaching the prohibition rather than the types of application to which the exception applies. We agree that this is a possible approach to the language of the section but we do not regard the resulting meaning as consistent with the section as a whole or the underlying legislative policy. In effect it would allow the exception to swallow the prohibition.
• (e) Mr Salmon also invoked the practicalities of the situation. He maintained that the exception necessarily meant that climate change considerations would sometimes be relevant under s 104E and that regional councils would have an implementation role in relation to national standards once they are implemented. He suggested that on the Genesis Power interpretation of the exception, it will be difficult for regional councils to exercise their rule-making powers under the exception as it would be difficult to envisage a sensible rule dealing with renewable energy production which would not, at least implicitly, bear on non-renewable applications. As is apparent, we have a rather different view which rests very much on making sense of, and giving effect to, the prohibition. We do not see the exception to s 104E as necessarily requiring much more than a generic acknowledgement, and factoring in, of the benefits of renewable energy production. With national standards not yet promulgated, we think it premature to comment on the practicalities of the implementation role of regional councils. And we see no reason why regional councils cannot exercise their rule-making powers under the exception in s 70A if the relevant rules are specifically addressed to GHG emissions associated with renewable energy production.

Disposition

[44] We declare as follows:

In considering the application by Genesis Power for a discharge permit relating to the discharge into the air of greenhouse gases associated with the proposed Rodney power station, the Auckland Regional Council must not have regard to the effects of that discharge on climate change.

[45] We reserve leave to the parties to apply to us to vary the form of this declaration. We also reserve costs.

Solicitors:
Russell McVeagh, Auckland for Plaintiff
LeeSalmonLong, Auckland for Defendant
L S Fraser, Auckland Regional Council as Intervenor