2. Recent Developments in Land Law

In this section, we consider four developments in land law that respond to the challenges of climate change:

• the recognition of new proprietary rights;
• the evolution of common law rules relating to easements and covenants;
• the incorporation of climate change considerations into land use and planning decisions; and
• the disclosure of climate related risks in the sale of land.

These developments represent only the beginning of the complex legal issues that future lawyers may need to consider when advising clients in the context of a changing climate.

2.1 The Introduction of New Kinds of Property Rights

As described in the previous section, the concept of property rights has been increasingly used to create new legal tools for achieving environmental management objectives. Property rights are particularly valued for their capacity to create tradeable interests in land. Land, however, has been reconceptualised over the last few centuries not as a single, unified parcel, but as a bundle of separable and severable component parts — such as soil, sand, rock, water, vegetation etc. It is easy to see how interests in smaller parts of landscapes may resemble things over which property rights might be claimed. While such interests do not constitute land or property, in the legal senses described above, they sometimes do function as new kinds of property rights to the extent that they might enable access, use and even transferability in ways that seem familiar to us as valuable land-adjacent (and land-dependent) interests.

Such novel interests — such as permits to discharge pollutants or fishing quotas — are typically not classified as property rights in a legal sense. However, the ability for a legal entity to hold an exclusive right to use natural resources in particular ways allow those resources to be valued and can incentivise protective or sustainable behaviours. As environmental regulation has evolved, interested parties have increasingly gained not only the right to use natural resources but also the ability to buy, sell or trade those rights on primary and secondary markets. Early examples include national and regional emissions trading schemes for nitrogen oxide (NOx) and sulphur dioxide (SOx), which were developed to reduce acid rain caused by air pollution. In the United States, such schemes have been implemented under the Clean Air Act of 1963 and through the Regional Greenhouse Gas Initiative.

Building on the success of NOx and SOx trading schemes, emissions trading schemes draw on property law concepts and doctrines to create emissions ‘units’ or ‘allowances’ that represent a specified quantity of GHG emissions. These units can be bought, sold or traded between participants, including transactions involving the State. Article 17 of the Kyoto Protocol (1997) provided the framework for an international emissions trading scheme (‘ETS’). Although a unified global scheme was never implemented, more than 36 national and regional ETS are currently in operation worldwide, including in Australia. An Australian Carbon Credit Unit (‘ACCU’), representing 1,000 kilograms (1 tonne) of avoided or sequestered GHG emissions, is currently valued at approximately $35 per unit. The Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) expressly recognises an ACCU as personal property, capable of being transferred between private parties by assignment, will or operation of law.^[1]

Property law is also now used to establish and protect carbon sequestration rights — rights to benefit from the capture and storage of carbon in natural carbon sinks such as trees, vegetation and soil. In New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia, carbon sequestration rights are recognised as specific or general types of property interests in land. Legislation in New South Wales, Victoria and Western Australia also recognises rights created by covenants and agreements created by personal arrangements between landowners and third parties to access, occupy or use land in ways that facilitate carbon sequestration. There is an acknowledged lack of consistency, certainty and integration of carbon sequestration rights within Australian state laws, and there is debate regarding the kind of property rights that can be properly regarded as ‘property rights’ in sequestered carbon.^[2]

Rights relating to the storage of carbon in engineered systems — such as disused coalmines — have similarly been recognised under legislation including the Greenhouse Gas Storage Act 2009 (Cth), Geothermal Energy Act 2010 (Qld) and Land Title Act 1994 (Qld). Future lawyers will need not only to understand the nature of these rights and how they can be created, transferred or enforced by clients but also to advise on the broader legal implications that arise from their existence.

2.2 Easements: Solar Access and Sea Level Rise

Easements are a type of servitude interest that confer rights or impose restrictions on the use of land for the benefit of other land.^[6] At common law, the land that benefits from an easement, referred to as the dominant tenement, must be clearly identifiable. For example, Figure 3 shows that Lot 2 is the dominant tenement benefitting from a right of way (ie an easement of way) that provides road access over Lot 1, which is the servient tenement.

Statute can also be used to create easements in gross. Such easements are expressed to be for the benefit of a utility provider (eg electricity, water or sewerage), so that there is no dominant tenement. However, lots on either side of the servient tenement in fact receive the benefit of the utility which is the subject of the easement. In Australia, easements typically create positive rights over land owned by another. However, ‘negative easements’ can also be created in limited circumstances, to restrict how land may be used to preserve certain rights, such as access to light or views. Easements registered on a certificate of title are protected by the principle of indefeasibility. Nonetheless, unregistered easements may still be enforceable against registered interests under statutory exceptions.

In the context of climate change, the law of easements has developed in two ways. First, ‘solar easements’ are being used to provide access to direct sunlight necessary for the generation of renewable energy, thereby supporting climate change mitigation efforts. Second, ‘rolling easements’ have been introduced to enable wetlands, beaches and other coastal ecosystems to migrate inland in response to sea level rise.

2.2.1  Solar Easements

To enable the generation of renewable energy on land, easements may be used to provide access for electricity transmission lines or to secure uninterrupted sunlight through solar easements. The creation of such easements for the installation of renewable energy infrastructure can impose physical restrictions on how a landowner may use their land. However, associated payments for hosting infrastructure may provide valuable economic support — particularly for farming operations facing financial hardship.^[7] As such, the development of property interests related to the clean energy transition not only facilitates climate mitigation but also creates new economic opportunities for landowners.

Restrictive easements or covenants can be used to ensure that a landowner continues to receive sunlight to a rooftop where solar panels are installed.^[8] Such instruments operate by limiting the height or placement of buildings on the burdened lot. Creating such property interests requires an agreement between two landholders, and a landholder may be unwilling to agree to burden their lot to protect solar access for a neighbouring property.^[9] In some jurisdictions, courts — particularly specialist environmental courts — have legislative power to impose easements in limited circumstances, such as when determining merit appeals of development applications.^[10] However, these powers are not always directed toward, or well suited to, facilitating solar access for neighbouring landholders.^[11] More commonly, such powers are used by applicants for development consent to obtain a right of way over another parcel of land.

The transition to cleaner forms of energy production is essential to achieving GHG-emission reduction targets (see Legal Education in a Changing Climate). This transition involves the installation of solar farms (Figure 4) and windfarms on land, together with related infrastructure such as large-scale batteries and extensive new transmission lines, given that renewable energy infrastructure is often located in rural and remote areas. While such developments are a necessary and beneficial part of the clean energy transition, they can also be contentious due to their impact on the physical landscape.^[12] Common concerns include noise generated by wind turbines,^[13] impacts on views^[14] and potential reductions in property values.^[15] As a result, it is not only the physical effects of climate change that are reshaping the property landscape but also the legal and spatial consequences of efforts to mitigate GHG emissions.

Planning law has also played a role in protecting ‘solar collectors’, such as rooftop solar panels, on private properties adjoining proposed development sites through requirements and guidance in planning instruments. When assessing development applications, decision-makers must balance the developer’s interests in maximising the use and economic potential of their land with potential impacts on neighbouring property owners, including any loss of access to sunlight.

2.2.2 Rolling Easements

The narrowing of beaches and the flooding in low-lying coastal and riparian lands are recurring events that are exacerbated by climate change.^[19] Rising sea levels and increasingly intense storms are contributing to erosion and inundation that damage buildings and infrastructure in these vulnerable areas.^[20] With over 87 per cent of the Australian population living within 50 kilometres of the coast,^[21] pressing legal questions arise about how best to address these challenges.

One strategy is the construction of seawalls to ‘defend’ properties from erosion, for example at Collaroy Beach in Sydney (Figure 5). However, seawalls often cause adverse effects on adjacent land, as the energy and volume of water in storm surges is redirected along the coastline, intensifying erosion and inundation on neighbouring properties. This has prompted disputes, public controversy, and litigation over appropriate responses to climate related impacts on private land. The Land and Environment Court of New South Wales has issued several decisions concerning the legality and appropriateness of defensive structures such as seawalls.^[22] These cases underline the limitations of isolated, site-specific responses and highlight the need for coordinated, landscape-scale strategies and more robust planning mechanisms, such as coastal management plans. We discuss mechanisms that might facilitate ‘planned’ or ‘managed’ retreat from these locations later in this chapter.

While environmental and planning laws are typically the primary legal tools for addressing environmental risks, climate change has prompted the innovative adaptation of traditional land law concepts, most notably, the easement. In the United States, rolling easements have been developed as a flexible mechanism to respond to the dynamic nature of coastlines. Rather than establishing a fixed, permanent relocation of an entire community, a rolling easement over an individual property adjusts over time as the shoreline moves.^[23] The aim is to allocate the risk between the private landholders and the State. Under this approach, once the sea moves further landward, only the affected portion of the land is permanently lost from the landholder’s title, and the landholder is not compelled to move. In some jurisdictions, financial compensation is available for the lost portion of land while in others it is not.^[24] Although not a simple or universally applicable solution, rolling easements illustrate the potential of land law mechanisms to help mediate the complex interface between public regulation and private land interests in the context of climate change.^[25]

2.3  Environmental and Planning Laws

Earlier in this chapter, we introduced environmental and planning laws as frameworks that operate alongside land law to regulate land use. In this section, we examine how conservation agreements established under environmental and planning legislation can support climate change mitigation, and how the anticipated impacts of climate change are considered in processing development applications.

2.3.1  Conservation Agreements and Land Management

Environmental and planning laws enable landowners to voluntarily enter into agreements with the State to permanently manage and protect natural resources and biodiversity on private land. Conservation covenants address both climate change mitigation and adaptation. They can be used to protect trees, vegetation and soils that function as carbon sinks, helping to offset GHG emissions. At the same time, they contribute to building the resilience of natural ecosystems to the impacts of climate change.

More than 6,000 conservation covenants currently exist,^[26] under programs in all Australian states as shown in Table 1.

By entering a conservation covenant, landowners may be required to undertake positive actions, such as planting or maintaining native vegetation, or may be restricted from certain activities, such as land clearing or development. While some landowners may enter these arrangements for philanthropic reasons, most programs offer financial incentives to encourage participation. In Victoria, for example, the Trust for Nature covers the costs of establishing and maintaining the covenant. In addition, landowners with conservation covenants may be eligible for tax deductions and concessional capital gains tax treatment under the Income Tax Assessment Act 1997 (Cth) div 31.

Conservation covenants are recorded on the title of the protected land. In Queensland, they are registrable and may appear on a title to land lodged with the Queensland Titles Registry. In other jurisdictions, however, conservation covenants — like other positive and restrictive covenants — exist only in equity and are not protected by the principle of indefeasibility upon registration. Nonetheless, recording a conservation covenant on the certificate of title to land in the register can serve as notice to parties dealing with the land and enables the covenant to be enforced against third parties in perpetuity.

2.3.2 Adapting Land Use for Climate Change

In Australia, environmental and planning laws are increasingly used to take a proactive approach to the predicted impacts of climate change on land, buildings and infrastructure. This occurs through both strategic planning instruments and development assessment processes. In jurisdictions such as New South Wales, Victoria, South Australia and Queensland, a growing body of decisions has imposed conditions on residential property development — or refused development approval altogether — where proposed sites are vulnerable to climate related risks.

Development approvals for properties have been withheld or conditioned in circumstances where sea level rise, flooding, inundation, storm surge or coastal erosion pose significant threats over the projected ‘economic life’ of a building (typically around 30 years).^[29] While structural stability is a central concern, planning authorities also weigh risks to critical infrastructure — including water supply, power and drainage systems^[30] — as well as the ongoing accessibility of land by emergency services.