Queensland faces ‘significant’ wellbeing decline if it doesn’t quickly transition to renewables, report says

A Queensland government-commissioned report by Deloitte says there could be “significant” declines in wellbeing, assets left stranded and a stagnating economy if the state doesn’t quickly transition to renewables.

The report by the global accounting giant, obtained under the state’s right to information regime, also suggests Queensland could have a bright economic future should it rapidly decarbonise in coordination with the rest of the world.

The New Futures, New Resources report says there “is no middle ground”, and the state must be open to a “whatever it takes approach” to adjust for “structural disruption”, or its biggest industry could face “rapid decline”.

Climate campaigners who obtained the internal document said the Palaszczuk government could no longer “walk both sides of the street on climate change and fossil fuels”.

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Brisbane-based clean energy and climate campaigner at the Australian Conservation Foundation, Jason Lyddieth, applauded the government’s “ambitious and forward thinking plan to get Queensland off coal domestically and set us up to be a renewable energy powerhouse”.

“But on the other hand they still talk up the long-term prospects of coal and gas exports,” he said.

“The [Deloitte] report is unequivocal that Queensland must rapidly decarbonise and play a constructive role in the global effort to get off coal and gas. If that happens, Queensland will have a thriving future.”

The state’s resources minister, Scott Stewart, said there was “still a future for coal in Queensland”, particularly metallurgical coal to make steel.

“Currently there is no other commercially viable way to create steel, which we need not only for construction but also to create wind turbines and renewable infrastructure,” he said.

Stewart said the government’s 30-year vision for the resources sector had a firm focus on critical minerals, such as copper, vanadium and cobalt, which are in abundance in Queensland.

“The world cannot meet decarbonisation targets without these minerals,” he said.

The Queensland Resources Council’s chief executive, Ian Macfarlane, said his sector was helping bring “prosperity and economic opportunity to many countries around the world”.

“The resources sector is guided by the policy frameworks of state, federal and international governments in meeting the current high demand for our coal and gas,” he said.

Macfarlane agreed “rapid global decarbonisation” created “enormous opportunities” in new economy mineral extraction and value-adding manufacture, but pointed to recent analysis that said “international demand should continue to support Queensland’s coal exports over coming decades, in particular for the state’s metallurgical coal producers”.

The Deloitte report came to light amid an advertising campaign from the QRC against the tiered coal royalty regime introduced by the treasurer, Cameron Dick, to cash in on the record profits coalminers have made on soaring commodity prices.

The mining lobby claims the new royalty regime will cost the state jobs and investment.

But the New Futures, New Resources report said the biggest risk to jobs and wellbeing in the state is a carbon-fuelled economy.

Of six futures modelled in the report, the scenario that leaves Queensland “worst off” is one in which both Queensland and the world fail to realise net zero by 2050 and value chains remain fossil-fuel dominated.

Related: Australia’s ‘carbon capital’ charts a course away from fossil fuels and a boom-bust cycle

The report describes this situation as a “lose-lose” scenario that must be avoided “at all costs”.

“The economy is smaller, the mining and resources sector is smaller, there are fewer jobs on the aggregate and industry level,” it said.

“In lose-lose, Queensland is suffering the worst consequences of global climate change and the mining and resources sector is highly exposed to disruption.”

The report warned multinational firms might seek to “redistribute their portfolios” to gain early advantage in the move towards “rapid global decarbonisation” – which risked leaving smaller firms and workers behind.

Under the lose-lose scenario in 2050 the economy would be still dominated by coal, oil and natural gas featuring “ageing fossil fuel assets” either “stranded” or “operationally subsidised”.

In contrast, the best-case scenario for the state is that in which Queensland rapidly coordinates its decarbonisation efforts in concert with the rest of the world. Under this scenario, Queensland’s mining sector adds $365bn to gross state product, employs more than 100,000 people and is well positioned for future growth.