“It’s a judgement that has to be tested and it is likely to be a decision for the industry and its various lobby groups to become involved with, and to agree on what to do,” Mr Clifford said on Monday.

Justice Brian Preston’s judgement has been welcomed by the environmental lobby as a landmark decision, partly because it counted the downstream or “Scope 3” emissions that would be generated in the countries importing Rocky Hill’s coal.

David Morris of the Environmental Defenders Office, which represented the residents’ group Gloucester Groundswell at the hearing, said it was the first time as far as the EDO was aware that a court had rejected such a project on the grounds of climate change.

Scope 3 emissions have not been generally considered in NSW coal mine approvals but after hearing evidence from Gloucester Resources and its critics – and after reviewing Australian and international cases where indirect emissions had been considered – Justice Preston found “the impacts of the project on the environment and the public interest justify considering” them.

“I don’t understand how we have arrived at this decision and the industry as a whole is going to have to respond to this,” Mr Clifford said.

“Over the coming weeks there will be discussions with the Minerals Council and others to understand what the policies are that these projects have to meet. The issue is that it’s not clear.

“The result of this is that there is more sovereign risk [in NSW] than in any country in the world.

“Even looking at thermal coal, we have the highest grade thermal coal in the world and the demand is there. If it is not met from here then it will be fed from elsewhere.”

UPPER Hunter state MP Michael Johnsen says other sectors of the economy will be seriously harmed if the “judicial activism” he says was displayed in Friday’s Rocky Hill court decision is allowed to stand.

The ruling in the Land and Environment Court against the project proposed by mining company Gloucester Resources has been hailed by environmental groups as a landmark decision in their fight against fossil fuels.

But Mr Johnsen said the decision by the court’s chief judge, Justice Brian Preston, “goes beyond the remit of what the court should be about”.

One of the major reasons for this was because Justice Preston included the “Scope 3” emissions – mostly the carbon dioxide emitted by the burning of the coal by Rocky Hill’s overseas customers. 

“The outcome is not surprising given that the department (of planning) had recommended against it but for the judge to make such a significant contribution with his comments around Australia’s climate change obligations to Paris is taking it to a whole new level,” Mr Johnsen said.

“It puts a lot of developments at risk. Agriculture, transport … so many parts of our community are at risk because of this judgement.

“The Upper Hunter has mines, wines, equines and bovines.

“All are as important as each other, all of them produce emissions, and so by the nature of this judgement, all of them are at risk.”

Mr Johnsen’s accusations of  “judicial activism” were criticised by upper house Independent Jeremy Buckingham, who has written to the court accusing the Nationals MP of contempt of court.

Mr Buckingham said yesterday that Mr Johnsen was trying to bring the court into disrepute but Mr Johnsen said he was entitled to his opinion “like any other citizen”.

The NSW Minerals Council was still examining the decision but chief executive Stephen Galilee said: “If the intention of the judgement is to make developments contribute to emissions reductions beyond Australia’s national targets, there will be dire consequences for a range of industries, including agriculture, manufacturing and transport, which are all major emitters”.

Mr Galilee said such an outcome would carry massive economic and household costs but have “almost no impact” on global emissions reductions.

 The Environmental Defenders Office, which was part of the case, says the coal industry could have put a “contrary view” to the court about climate change, but did not, indicating that it accepted the science about global warming. Chief executive David Morris agreed the decision could “affect industries across the board”.

 The Newcastle Herald was unable to contact Gloucester Resources but legal sources said any appeal  would be heard by a full bench of the NSW Supreme Court. 

Read the verdict here