For more than a century, Australia rode on the sheep’s back. Our prosperity – indeed much of our national identity – was linked to our farmers’ ability to export wool.

These days wool accounts for less than one per cent of our total exports, down from one-third before World War II.

In Western Australia, timber – known locally by its Noongar name ‘jarrah’ – was also one of the state’s biggest early exports. In my home town of Rockingham, the main street hosted the railway tracks that lugged jarrah from the timber mills of the state’s south-west. 

From Rockingham it was shipped around the world to be used as railway sleepers, to build bridges, and to pave the cobbled streets of London, Berlin and Paris.

All that remains of that industry in Rockingham is the name of the street, Railway Terrace, and an old jarrah log memorialising the heyday.

Why did Australia stop exporting so much wool? The garment market changed. The world invented polyester. Why did we stop exporting so much jarrah? New materials became available, demand declined, and concerns about sustainability led to the protection of old-growth forests.

Export industries change as demand from markets changes and industries adapt to new environmental and social standards. We have depended on exports to support our economy since the 1850s. As a nation, we produce more than we can ever consume.

What happened to wool, our biggest export for a century, could happen in the future to our current big three merchandise exports: iron ore, liquefied natural gas and coal.

Iron ore may be hit by reduced demand as China seeks to source supplies from Africa, lift production from its own mines, and recycle steel. The future of gas and coal exports will largely be determined by decisions taken by foreign governments, investors and consumers in a low-carbon future.

The economic realities of climate change will drive the next big shake-up in Australia’s merchandise exports. 

The rest of the world is moving inexorably to net zero emissions by 2050. More than 120 countries, including 70 per cent of our trading partners, have already committed to this. Australia is the only developed country yet to act.

The movement is backed by international investors. If Australia continues to ignore the reality of climate change, we risk being boycotted by global capital. 

Our exporters face the additional burden of carbon taxes on imports that are being considered by the EU, UK and US, with others likely to follow.

These taxes will be designed to hit nations, including Australia, that have made insufficient efforts to combat climate change.

So what does all of this mean for our coal and gas exports? It means we need to wake up and take notice. Miners are taking on the challenge and committing to achieving net zero emissions by 2050, as their customers, owners and financiers all demand it.

And how should politicians such as myself be communicating with workers whose livelihoods are linked to extractive industries? I start with being honest.

I agree with my friend and colleague Joel Fitzgibbon on many things. But I don’t believe we can ignore changes in international demand and the policies of purchasing nations. 

I believe that Australian coal miners will continue to export thermal and metallurgical coal to customers in Asia for some years. International markets will be able to buy Australia’s high-quality coal for as long as they want to.

Different countries will have different paths to net zero emissions. Some will require coal as part of their energy mix for a longer period than others. Many will continue to need our coal and iron ore for steel-making – which in turn will be used to build wind turbines that generate clean energy.

And as the world decarbonises, new export opportunities will arise and new jobs will be created. Australia has huge reserves of the minerals – lithium, copper, nickel, manganese, cobalt and rare earth elements – needed to make lithium-ion batteries, wind turbines, solar panels and electric vehicles.

We also have a once-in-a-generation opportunity to ensure that these minerals are not simply dug out of the ground and shipped overseas, but are processed in Australia.

Next month, Opposition Leader Anthony Albanese will lead the Labor shadow ministry to Port Hedland in the Pilbara, the home of the world’s largest bulk export port.

I have seen first-hand the Pilbara’s world-leading mining industry and spoken to some of the thousands of workers there.

The trip will be an opportunity for many of my east coast colleagues to see for themselves and listen to the concerns of the miners who contribute so much to our national wealth.

The message to the people of the Pilbara, the Hunter, the Goldfields, Queensland and all other mining communities is clear.

Labor unequivocally supports the resources sector – all of the resources sector – and the jobs it creates. Now and in the decades ahead.

This opinion piece was first published in The Australian Financial Review on Thursday, 27 May 2021.