By Brad Jessup
Australia’s first national laws to put a price on carbon were effective to their end; reportedly leading to reductions in Australia’s combined greenhouse gas emissions. In their absence it has been reported that increases in emissions have resumed. While our new Prime Minister grapples with how to rein in these emissions, the High Court last year confirmed that the carbon price laws were lawful, and through the prism of the Constitution fair, to their end. The history books will show, however, that politicians failed to make the case for a carbon price law, but they devised and crafted a successful, if complex though geographically unfair, legal policy. Over the past few days the protagonist in the High Court case, Queensland Nickel, with the business faltering, has brought claims of fairness into the political discourse around this business’ carbon intensive operations.
The Constitution and no interstate discrimination
In Queensland Nickel Pty Ltd v Commonwealth  HCA 12, notable also as Nettle J’s first judgment, the High Court dismissed a claim by Queensland Nickel that regulations supporting the principal Act, the Clean Energy Act 2011 (Cth), were unconstitutional based on their geographic effect. Arguments relying on s 99 of the Constitution, the non-discrimination provision, that the regulations inadvertently and indirectly discriminated against the Queensland-based refinery business wholly owned by Clive Palmer MP, the federal parliamentary member for Fairfax, were rejected.
The High Court concluded that the additional financial liability imposed on Queensland Nickel relative to other refineries in Western Australia that triggered the case was not a cause of a difference or discrimination on the grounds of physical or jurisdictional geography but a result of past decisions made by Queensland Nickel on purely financial grounds. The effect of the laws as experienced by Queensland Nickel relative to its Western Australian competitors may have had an increased financial burden on Mr Palmer’s company, which has not been attributed to the company’s financial woes, but that burden was not attributable to the law; rather business decisions made by the company in its infancy.
In the High Court case, Nettle J adopted the plurality view in the Fortescue Metals case, and found that the particular parts of the carbon price regulation that set out liabilities for nickel refineries ‘did not discriminate between States. In terms, it applied equally to eligible persons carrying on the production of nickel regardless of the State of production’ (at ). Although Nettle J acknowledged a difference in practical effect of the laws for Queensland Nickel, he considered that ‘in this case it does not appear that any of the differences between the plaintiff’s and the Western Australian nickel producers’ inputs, production processes or outputs were due to differences between Queensland and Western Australia in natural, business or other circumstances’ (at ).
Instead, Nettle J focussed on past decisions about mining processes as giving rise to the different effect of the laws. The mining process adopted by Queensland Nickel was found to have been the reason for the greater financial burden under the laws. Although Nettle J conceded that the mining process decision ‘was informed by geographic considerations’ (at ), the decisions were ultimately based on delivering to each firm the greatest possible financial windfall at the time the decisions were made in the historical technological settings.
This conclusion, which eschews considerations of the geography of place, effect, and time in preference for considerations of financial autonomy offers an appropriate and consistent ending for the Clean Energy Act 2011, because financial interests trumped geographic interests and fairness throughout its invention, implementation and repeal.