Q&A: What are the economic and employment effects of phasing out fossil fuels in Australia? - Lethal Heating Editor BDA

Key Points Summary
Fossil fuel phaseout risks job losses in coal-heavy regions Net economic benefits possible with strong renewable investment Clean energy jobs can outnumber fossil jobs with proper planning Government support essential for fair transition Exports and royalties likely to decline without new industries

Phasing out fossil fuels in Australia is economically inevitable. Whether it brings ruin or renewal depends on what replaces them.

Australia’s economic identity has long been tied to coal, gas, and oil.

But the urgent need to reduce greenhouse emissions means these industries will shrink, and with them some jobs, royalties, and export earnings.

The question is whether Australia can manage this transition fairly and intelligently.

Jobs at Risk and Jobs on the Rise

Roughly 50,000 people work directly in fossil fuel extraction in Australia, especially in Queensland, Western Australia, and New South Wales.¹

When related supply chains are included, the number doubles, but it’s still less than 1% of total national employment.

Meanwhile, the clean energy sector is growing rapidly, with wind and solar projects employing over 30,000 people, expected to triple by 2030.²

With appropriate investment, renewable jobs, especially in construction, maintenance, and manufacturing, could far outstrip losses in fossil fuels.

Economic Impacts: Risks and Rebalancing

Fossil fuel exports earned over $150 billion in 2022–23, led by coal and LNG.³

These exports support Australia’s trade balance and fund state budgets via royalties and corporate taxes.

But global demand is shifting. Japan and South Korea, both major customers, are committing to net zero and reducing coal imports.

Without investment in green exports, like renewable hydrogen, critical minerals, and green steel, Australia risks a sharp economic downturn.

The Just Transition: Who Bears the Cost?

The burden of transition won’t fall evenly. Regions like the Hunter Valley and Central Queensland face significant disruption.

Experts call for a “just transition” approach, including retraining, regional investment, income support, and infrastructure spending.⁴

Victoria’s Latrobe Valley Authority and Germany’s coal-exit model show how public planning can ease change.⁵

Without this support, job losses could drive social dislocation, political backlash, and economic harm.

Looking Ahead: Transformation or Decline?

Australia stands at a crossroads.

Managed wisely, the fossil phaseout could bring new industries, cleaner air, and long-term prosperity.

Mismanaged, it could leave workers stranded, regions impoverished, and the climate crisis worsened.

The outcome depends on political will.

And how urgently we act to replace the old economy with the new.

Footnotes

1. Australian Bureau of Statistics – Mining Employment

2. Clean Energy Council – 2024 Clean Energy Report

3. Australian Energy Update 2023 – Department of Climate Change, Energy, the Environment and Water

4. Climate Council – Just Transition Explainer

5. International Trade Union Confederation – Just Transition Centre

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