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The “resource curse” concept holds that geophysically wealthy countries often see poor results from exploitation of this wealth. Australia’s institutions have traditionally guarded against the worst negative outcomes seen elsewhere. Yet Joëlle Gergis’s essay reminds us that future development of Australia’s geophysical assets could have particularly stark and, depending on policy choices, wildly varying socioeconomic implications both at home and abroad. The central challenge is that Australia and its international partners must, to an unprecedented extent, develop one form of resource abundance at the direct expense of another.

Gergis outlines Australia’s past and likely frightening future experience of climate instability. Yet she also outlines Australia’s atypically high degree of agency to influence this future trajectory. Australia is currently a world-leading supplier of climate-destabilising fossil fuels and goods made with these. It is also a world-leading supplier, or potential supplier, of numerous mineral inputs to climate-stabilising renewable energy technologies. It is also a potential world-leading supplier of renewable energy resources and goods made with these, such as “green” iron and steel.

Much rests on the future decisions national and international actors make about which combination of Australian resources they utilise. Sustained development of, and trade in, a more climate-destabilising mix of resources will necessarily impede global socioeconomic development. More climate-stabilising dynamics would produce far more beneficial results.

The most hopeful thread running through Gergis’s essay is around the evolution in local assessments of the relative economic costs and benefits of climate action. Australia’s leaders historically saw only downside in curbing our own and our trading partners’ emissions. Now, as Gergis notes, Australian climate change and energy minister Chris Bowen feels comfortable describing a global fossil fuel phaseout as “Australia’s economic opportunity.” Coalition support for an Australian nuclear energy sector is widely considered a diversionary tactic. Yet it does at least illustrate how the national debate now firmly demands consideration of alternative decarbonisation visions, rather than decarbonisation versus business-as-usual.

However, numerous obstacles still remain in Australia’s path to the “renewable energy superpower” status the Labor government is targeting. This concept has already run into challenges from path-dependent thinking, which often seeks a like-for-like replacement for fossil fuel exports. Australian and partnering governments and industry members have, for example, likely already spent too much time advancing the vision of Australia as a major exporter of renewable-generated hydrogen, which is beset by myriad cost and technical challenges.

Numerous vested fossil fuel interests at home and abroad might also frustrate giving priority to more economically appropriate pursuits. Gergis gives a good account of how fossil fuel industry members and government supporters are heavily promoting the likes of coal-to-gas switching, and overreliance on speculative emissions fixes such as carbon capture and storage. The main hope of these efforts is not minimising emissions but minimising stranded assets.

Unfortunately, pushback against the renewable superpower concept is not limited to domestic sources. International energy customers have proven particularly powerful proponents of keeping Australia as a fossil fuel superpower. Japan, most prominently, has leveraged the energy market fallout from Russia’s war in Ukraine, and its close geopolitical alignment with Australia, to appeal for Australia to remain a “trusted” provider of coal and gas, seemingly in perpetuity.

Gergis doesn’t convey the full troubling nature of Japan’s interventions in this regard. Japanese critics have clearly argued that any moves by Australia to reduce fossil fuel supply would directly jeopardise their country’s energy security. Yet, on gas at least, recent analysis supports a view that Japanese companies are mostly interested in Australian resources supplying new markets these same Japanese companies are developing, with heavy state support, in areas such as Southeast Asia.

The uncomfortable truth is that many of Australia’s international partners continue to see more of their own economic opportunity as lying in sustained fossil fuel use. Those who argue Australia must continue to make concessions to Japanese and other Asian demands for fossil fuel security, to help attract foreign investment in national green endeavours – and there are many – may be either disingenuous or set for considerable disappointment.

Interests and actors tied to Australia’s fossil fuel wealth might forever find justifications for continued exploitation of these resources. The historical argument for why Australia could not take more meaningful climate action was, after all, that domestic economic interests precluded it. Policymakers supported this rationale even as it came at significant international strategic cost, including, for example, in relations with the highly emissions-conscious Pacific. Now that Australia’s leaders appear to recognise the sizeable domestic economic benefits that improved climate action might deliver, they have been presented with fresh, international strategic reasons for not proceeding.

Another worrying development not fully captured in Gergis’s essay is the high risk that the renewable superpower vision might itself be co-opted by incumbent fossil fuel interests. They say that if all you have is a hammer, everything looks like a nail. Australian policymakers have acquired some new renewable tools. Yet they have retained a very large fossil fuel hammer. They thus continue to see a lot of imaginary net zero nails.

Australia’s resources minister, Madeleine King, for example, routinely celebrates the supposed role gas and even coal can play in processing the minerals and manufacturing the technologies necessary for renewables deployment. She also notes the role of gas in backing up intermittent wind and solar power. While there is some truth to these arguments, the effect is often to justify massive expansion of supply that is not warranted by energy transition-linked demand, and also to forgo options for reducing this demand. State leaders in the key gas jurisdiction Western Australia go even further, in noting their climate “obligation” to get more gas to domestic and international customers. This is at the admitted cost of the state’s, and by extension the nation’s, consistently rising emissions.

Political rhetoric from the international to state level has neatly aligned with fossil fuel and carbon-intensive industry positions. It has in turn been backed by Australian policy commitments to sustained use of fossil fuels. Such commitments often go beyond the “all carrots, no sticks” approach – that is, heavily subsidising green economic interests while not penalising brown equivalents – that now dominates international climate policymaking such as in the US Inflation Reduction Act. For its part, Australia still offers significant state support to fossil fuel and carbon-intensive industries.

Two closely timed 2024 decisions are of particular interest. The federal budget released in May contained a $22.7 billion “Future Made in Australia” support package to develop green industries. Yet it was immediately preceded by a new national Future Gas Strategy. The gas strategy made no new fiscal commitments, but it did signal Australia would maintain a regulatory environment that welcomed utilisation of gas “to 2050 and beyond.” Japan and other Asian countries greeted the document with immediate claims of renewed investment certainty.

In January 2024, the federal Powering the Regions Fund also provided two major steel-related subsidies: $63.2 million to Liberty Steel and a much larger $136.8 million to BlueScope Steel. The Liberty funding was intended to aid development of an electric arc furnace at Whyalla, South Australia, to kickstart green iron and steel activity. BlueScope’s allocation will help extend the life of a coal-consuming blast furnace at its Port Kembla, New South Wales, steelworks. BlueScope had already committed to relining its blast furnace instead of investing in viable lower emissions technology. Its federal funding was, however, still couched in climate-conscious terms. The government said it would ensure continued domestic production of steel used to produce renewable technologies.

Australian policymakers profess to see no tension between their disparate sets of commitments. They often even present what are clearly brown investments as somehow green. These are obviously flawed positions. Facilitating sustained fossil fuel use creates inevitable opportunity costs around the allocation of energy demand and capital. This will only delay the achievement of Australia’s renewable superpower vision and its important role in mitigating climate change.

Australia’s current leaders should still be congratulated on taking the important step of acknowledging that the country should transition from a fossil fuel to a renewable energy superpower, for both global climate and national economic reasons. Yet doing so at the speed and scale that Joëlle Gergis notes is necessary invites more deliberate choices. Australia must break the resource curse that fossil fuels and carbon-intensive interests are imposing on national and global socioeconomic development. Our domestic policies and international partnerships must give clear priority to one form of geophysical wealth over the other.