Australia’s shift to renewable energy is a rare chance to redesign our economy and improve wellbeing, equity and social cohesion. A truly just transition would reshape much more than the energy system.

A “just energy transition"seeks to balance risks and benefits fairly, leaving no one behind. However the focus, in Australia at least, has largely been on mitigating the impacts of the shift to renewables for workers and communities that need to be reshaped as fossil fuels disappear as a source of energy. Little attention has been given to the broader economic, social and environmental transformation that can and should flow from this significant change in the underpinning of the economy.

At the recent COP30 in Brazil the conference decided to establish a ‘Just Transition Mechanism’ to increase international cooperation, technical assistance, capacity-building and knowledge-sharing to facilitate the transition to low emissions economy.

COP subsidiaries have been tasked to prepare a draft to operationalise the mechanism in June 2026 for possible adoption at COP31.

A just transition needs to be much more than upskilling and reskilling workers in green jobs, or  phasing out fossil fuel subsidies. It can also be about repairing historical inequities, such as unequal pollution burdens. It can mean ensuring social benefits, such as clean transportation or new workforce opportunities, are available for all. And it can involve prioritising social welfare as a key indicator of national progress. As energy is such a critical input into the broader economy it makes sense to broaden the scope of impacts and opportunities and use the energy transition as a lever for a broader societal transformation.

There are many dimensions to the transition: A just transition should include “ distributive justice,” which calls for the benefits and challenges of the transition to be fairly shared across society; “ procedural justice,” which means people should be involved in decision-making processes that impact them; and “ restorative justice,” which calls for addressing past harms.

Indeed, there is an opportunity to see the transition away from fossil fuels as a unique paradigm shift and use the change as a catalyst for “ the economy we could have.”

Climate change is a real and existential threat and needs to be factored into policies and programs from governments, as well as decisions taken by households and communities. It will influence where and how we must live.

However, the recent survey Australian Electoral Study found that respondents, reflecting on the 2025 Australian election, ranked climate change seventh out of 10 priority issues. The cost of living, management of the economy, taxation and housing affordability all rated more highly. Our energy transition can help address all of these issues.

This brings into consideration whether economic design and values are accurately reflected by current political priorities. In 2023 the treasurer, Jim Chalmers, released a national wellbeing framework ( Measuring what Matters) to complement economic data.

Health, security, sustainability, cohesiveness and prosperity were the five themes of the framework. Measuring progress will be critical and will hopefully lead to a rethink in policy priorities.

The ABS have recorded a steady decline in overall life satisfaction since 2014 and, according to the World Happiness Report 2025, Australia has slipped out of the top 10 happiest countries. Finland, Denmark, Iceland, Sweden and the Netherlands, high taxing countries with significant government intervention, consistently occupy the top five spots.

Whilst these countries enjoy high levels of prosperity they are not the richest countries in the world and Mexico has replaced Australia in the top 10. It seems that caring and sharing (or wellness) economies, not growth and financial metrics, seem to be the key.

I recently had the opportunity to visit Scandinavia and discovered and observed some of the foundations of these happy economies. Scandinavian countries benefit from significant government investments in support of parental leave, childcare, healthcare (medical, hospital and prescriptions) and free education, including at tertiary level. In Denmark students are financially supported for the first seven years of their university study.

Strong cultural values and ensuring connectedness are also important. In Copenhagen – recently crowned the world’s most liveable city – local government encourages the sharing of meals through community lunches.

Finland just beats Denmark as the happiest of countries. Effective social policies, a balanced lifestyle, trust in institutions and a deep appreciation for nature are said to underscore their ranking.

What is informative for an Australian context is that the energy assets of Denmark, Norway and Iceland are used to advantage the broader economy. Iceland, with significant and accessible geothermal energy resources, is nearly 100 per cent powered by renewable energy. It has attracted new industries such as green steel and aluminium production.

In Denmark, the government has supported renewable energy technologies, such as wind turbines and concentrated solar power, to develop high growth export industries. Norway, of course, is renowned for its massive sovereign wealth fund, currently worth approximately A$2.29 trillion. Whilst this fund is the dividend of the massive oil and gas developments, the government invests heavily in health and life sciences and public health infrastructure.

It begs the question – what could Australia invest in if there was tax reform, greater transparency in our institutions and a properly structured resources rent tax? A truly just transition could drastically improve our performance in areas such as gender inclusion, reduced inequality, increased Indigenous empowerment and access to housing; amongst myriad social and environmental justice issues.

High taxes, heavily interventionist governments and a culture of cohesiveness and connectedness have contributed to happy, healthy and prosperous countries in Scandinavia where populations value fairness and ecological stewardship.

Australia rightly aspires to be a renewable energy superpower, due to our research capabilities and the abundant natural earth and climate resources. Transitioning from carbon-intensive industries to more sustainable ones can bring remarkable benefits. More investment, hundreds of thousands of new jobs, and new opportunities for growth in regional Australia are all likely but a “just transition” can be transformative beyond economics.

Many countries are now committing to the wellness economy; Nordic countries are just the leading exponents. To a large extent these exemplars are built on high degrees of trust in government and their public and private institutions.

In Australia, our transition and concomitant economic transformation is hindered by crisis-driven responses, vested interests, individualistic mindsets, and systems that are sadly lacking in transparency and trust.

Measuring what matters is one example of the upstream change that can support and encourage governments to focus on issues beyond the economic. By partnering with industry and civil society the economy can redress many of the issues that Australians are concerned about. “The economy that we could have” would be prosperous, ensure that no-one is left behind, protect and regenerate the environment and we could all be a whole lot happier.