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Groundswell Gloucester - the group that had earlier fought off AGL's 330-well coal seam project near the town - welcomed the decision not to appeal.

"This is great news for a small town that has had this mine proposal hanging over its head for [more than] 10 years," John Watts, a spokesman for the group, said. "It was always an ill-considered idea, which should have been rejected years ago."

David Morris, head of the Environmental Defenders Office of NSW, said the court's rejection of the mine partly on the basis of its contribution to global warming had created reverberations "felt across this country and around the world". The lack of an appeal now removed "any doubt of its legal validity".

"This is the leading case for how decision-makers should take into consideration a project's impact on climate change, and on the social health and wellbeing and cultural health of a community," he said.

The NSW government should now act to codify the decision to ensure other fossil-fuel projects in the state have to include similar assessments of the warming impacts in the planning approval process, Mr Morris said.

Environmental group Lock the Gate said the government should take "this historic opportunity" to consider two other new NSW coal mines - United Wambo and Bylong - now under consideration by the Independent Planning Commission "in a new light".

"The Bylong project has a lot in common with Rocky Hill because, as well as contributing to climate change, it would have unacceptable local impacts on agriculture, water and a beautiful valley rich in natural and cultural heritage," Georgina Woods, a spokeswoman for the group, said.

The Herald sought comment about the court decision from the state's new Energy and Environment Minister Matt Kean and Planning Minister Rob Stokes.

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Climate litigation is dubbed as a "new weapon" to force companies and countries to take greenhouse gas emissions into account, with more than 1000 cases before various courts around the world.

Climate stance shifting

The NSW Coalition government under Premier Gladys Berejiklian has indicated it will give greater attention to climate and other environmental issues after it was re-elected last month.

On Wednesday, Mr Kean used the first question time of the new Parliament to describe the new global report out this week into accelerating species extinction as "an important wake-up call for all of us".

Mr Kean added that "there is no greater risk to our environment than climate change", and a new climate department would ensure "NSW is playing its part in reaching the Paris goal" of limiting warming to less than 2 degrees of pre-industrial levels.

Julie Lyford, chairwoman of Groundswell Gloucester, said "affected residents are absolutely delighted that they can now get on with their lives. The uncertainty and anxious waiting is over.

"With climate change threatening everyone and everything on the planet, we owe it to this and future generations to step away from fossil fuels, embrace renewables and work towards just transitions," she said.