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Yesterday the Australian Bureau of Statistics reported that Australia had recorded its biggest trade surplus in August — more than $15 billion. As recently as 2016, Australia recorded a trade deficit; in 2017 the surplus was just $8.9 billion for the whole year.

And fossil fuels are responsible.

Despite expectations the slump in the iron ore price would materially reduce the surplus (to a mere $10 billion for the month), LNG and coal — both thermal and coking — came to the rescue, allowing Australia to record its biggest surplus on the back of high global energy prices driven by energy crises in China, Europe and the UK.

No wonder Prime Minister Scott Morrison is reluctant to attend Glasgow — he’ll do so as one of the world’s biggest beneficiaries of the stuff the rest of the world wants to get rid of as quickly as possible.

While ostensibly that means a dilemma for Australia on a heating planet where the rest of the world — bar some criminal regimes like Russia and Saudi Arabia — wants to end its addiction to fossil fuels, in fact it sets Australia up to transition smoothly from a fossil-fuel superpower to a renewables superpower, again exploiting our massive natural advantages.

For the moment, iron ore is in decline as China works hard to curb steel production. The September quarter Resources and Energy Quarterly from the Department of Industry, Science, Energy and Resources shows that, after peaking at $153 billion in 2020-21, iron ore export earnings are forecast to drop to $132 billion in the year to June 30, 2022. That’s based on a forecast average price of US$115 a tonne for the global benchmark. It’s about US$110 a tonne now, forecast to fall to US$85 a tonne in 2022-23, and the value of those exports will fall to $US99 billion in 2022-23.

But the value of LNG exports will rise from $30 billion last year to $56 billion this year; oil exports are expected to lift earnings to $11.2 billion in 2021–22, coking coal exports are forecast to jump from $23 billion to $33 billion in 2021-22, and thermal coal shipments are forecast to rise to US$24 billion from US$16 billion.

All up, the extra exports of carbon in this financial year is estimated at $48 billion.

There’s big growth in minerals for renewables as well: lithium is the biggest growth market but coming off a smaller base, with export earnings set to rise from US$1.1 billion last financial year to US$3.8 billion by 2022-23; earnings from copper, another boom renewables commodity, are forecast to rise from $11.4 billion in 2020-21 to $14.4 billion in 2022-23.

Even if the longer-term trajectory for fossil fuel exports is downward as decarbonisation kicks in globally, a last convulsion of fossil fuels will deliver a boost to the Australian economy and to government coffers (mainly via coal — the tax arrangements for offshore gas mean we won’t see much extra revenue from more LNG exports).

A government with a coherent economic and energy policy would see this as the ideal opportunity to transition Australia from a fossil-fuel energy superpower to a renewable energy one, focused on green hydrogen exports rather than the government’s preferred blue hydrogen –, favoured by its fossil-fuel donors — and embracing the jobs and investment that will flow from renewable energy infrastructure, rather than looking for a way to only do the bare minimum not to face carbon tariffs and international humiliation.

In doing so it would be able to compete for the first-mover advantage that Australia squandered with solar technology, where our natural role as world leader was transferred to China, Germany and the United States.

This shouldn’t be difficult, even for a carbon addict: look at the example of the global car giants — traditionally among the most recalcitrant of corporate culprits on climate issues. They’re using their revenues and profits from fossil fuel-reliant internal combustion engines to pay for an investment boom in batteries, new car plants, retraining and recycling, the size of which dwarfs most other spending.

Best estimates put the 2021 cost of the plans of Ford, GM, Toyota, Stellantis, Nissan, BMW, Mercedes, Renault and a host of others at more than US$250 billion. And that doesn’t include the spending of the Silicon Valley giants in transport.

Instead, Australia at a federal level is suffering a variant of Dutch disease: our great fortune to be a fossil fuel energy superpower prevents us from using that as an opportunity to move into what will eventually prove the far more rewarding world of renewables that will provide better long-term benefits in terms of economic growth, productivity, jobs and investment. That job has fallen to the states, but the absence of the Morrison government from energy policy — except to use it as a mechanism to reward its donors — continues to cruel investment and the jobs that will accompany them.