The Heathrow Decision - What does it mean for Infrastructure?

On 27 February the Court of Appeal gave its hotly anticipated judgment in the judicial review of the Airports National Policy Statement (ANPS).  The Court declared the ANPS to be unlawful based on the failure of the government to have regard to (or to have indicated how it has had regard to) the Paris Agreement when designating the ANPS.

The judgment has direct implications for the development of a third runway at Heathrow Airport as the ANPS sets out the national policy support for that project.  Indeed, an application for permission to appeal to the Supreme Court was submitted by the airport operator almost immediately after judgment was handed down.

But does the decision have wider implications for nationally significant infrastructure projects which do not yet have a Development Consent Order (DCO)?

The facts

The ANPS was designated as national policy by the UK government in June 2018.  At that time, the Climate Change Act 2008 (CCA 2008) had set a target of achieving an 80% reduction in 1990 greenhouse gas levels by 2050.

Prior to the designation of the ANPS, the UK government had also committed to the Paris Agreement, which was ratified in November 2016.  The Paris Agreement enshrined a stronger international commitment to mitigating climate change and a clear aspiration of achieving net zero greenhouse gas emissions from 2050. 

The judicial review claim against the controversial ANPS was pursued by the Mayor of London, 5 local authorities and several environmental groups.  Having lost their case in the High Court last year, the claimants succeeded on appeal on one ground relating to climate change.  On this point, the Court of Appeal held that the government had breached its duty under The Planning Act 2008 to give an explanation of how the ANPS took account of government policy in relation to the mitigation of climate change.  Put simply, the Court held that the ANPS should have taken into account not just the government’s targets under the CCA 2008 but also the government's commitment to the Paris Agreement.

The implications for other National Policy Statements (NPSs)

It is important to note that the judgment focussed on government policy and not DCO applications.  Going forward, the government is likely to be keen to ensure that any new NPS has ticked the legal box and expressly states that it has taken into account the Paris Agreement in the reasons for its designation.

For existing NPSs that do not expressly take into account the Paris Agreement (and indeed there are many that were designated before the 2016 Paris Agreement for example, those NPSs relating to transport, energy and waste development) the Court’s decision does not, and cannot in our view, mean that any such NPS is retrospectively rendered unlawful.  The 6 week judicial review challenge period will have expired against those NPSs in any case.

The big question is whether the government will in light of the judgment now see the Paris Agreement as a “significant change”, which under the 2008 Act could trigger a review of NPSs which do not expressly deal with the Paris Agreement.  If an NPS is reviewed, any DCO application not yet granted which is reliant on the NPS is suspended.  A review of some or all of the existing NPSs would undoubtedly lead to significant delay for DCO applications which have not yet been determined - and ultimately delay to the delivery of much needed nationally important infrastructure. 

A number of legal challenges have been brought against existing NPSs on the basis that the Paris Agreement forces the government to review these. The government says it is currently considering whether its approach to review all or some of these NPSs.  The Paris Agreement has been in place since 2016 and the judgment does not suddenly make it a new issue.  In our view, a wholescale review of existing NPSs by the government would not be proportionate and the consequences of such action could be economically disastrous.

Where does this leave DCO applications?

Although the judgment related to national policy, it is directly relevant to DCO applications.  This is because the 2008 Act requires all DCO applications to be determined in accordance with the relevant National Policy Statement (NPS) if there is one in place.

The judgment therefore raises concerns for DCO applications which are reliant on an NPS which does not take into account the Paris Agreement (whether the NPS predates the Paris Agreement or otherwise). The 2008 Act allows the Secretary of State when determining a DCO application to take into account other “important and relevant” matters, which would include consistency with the Paris Agreement.  It also expressly allows the Secretary of State to depart from the NPS where to follow the NPS would lead to the UK being in breach of  its international obligations.  This means that an individual project’s ability to conform with the Paris Agreement may be a material consideration in the determination of the DCO application notwithstanding that the project complies with the relevant NPS where such NPS is not consistent with the Paris Agreement.

Unless the judgment is overturned, it would appear prudent to ensure that a DCO application deals very clearly in its supporting evidence with the scheme’s impact on climate change and specifically addresses the issues in the Paris Agreement regardless of whether the relevant NPS takes the Paris Agreement into account.

In summary, the judgment weakens the previous ability for a project DCO to rely on an NPS for policy support where the NPS does not expressly take into account the Paris Agreement.  However, the Court was keen to emphasise that just because a project is inconsistent with the commitments in the Paris Agreement, it does not automatically mean it cannot be permitted.  Accordingly, for DCO applications relying on an NPS that does not take into account the Paris Agreement, the judgment is not fatal; but it is not helpful and promoters will need to consider the risks of non-compliance carefully.

The Supreme Court has given the airport operator leave to appeal and the Court of Appeal’s decision may be overturned by the Supreme Court.  In the meantime, it is hoped that at the very least the government will issue guidance on how it intends to respond to the judgment in relation to NPSs which do not deal with the Paris Agreement.  This would at the least give certainty to those promoting, or funding, nationally important infrastructure projects in reliance on those NPSs.