'This is our big chance': Treasurer Jim Chalmers says opportunity beckons from global energy transition

The nation is already the world's largest producer of lithium and possesses vast reserves of other key commodities including nickel, zinc and bauxite that will be essential in helping make the renewables technologies, electric vehicles and other products needed to help meet the net zero emission by 2050 target, Treasury's Intergenerational Report, due out on Thursday, is expected to say.

According to the report, global demand for critical minerals will leap by 350 per cent by 2040 as countries rush to build batteries, wind turbines, electric cars and other devices and Australia is well positioned to help meet the need.

Australia's exports of lithium are expected to double by 2027 and the country is "one of the few in the world that has all three key elements of the aluminium industry [and] aluminium is an important input to a number of technologies critical to the energy transition", the report says.

Treasurer Jim Chalmers said this was the nation's moment.

"This is our big chance and our big opportunity," Dr Chalmers said.

"We have just what the world needs, just when the world needs it, and that's what the Intergenerational Report has confirmed."

The Treasurer said the nation had a chance to go beyond just "rip and ship" and develop an industry around refining and manufacturing that could create significant jobs and wealth.

But the same report has also warned of the steep costs if humanity fails to limit the global temperature increase to less than 2 degrees.

According to Treasury, if the world misses the Paris Agreement target it would cost the nation more than $420 billion in lost labour productivity alone.

Not only would there be a massive drop in labour output over the next forty years, but the cost of natural disasters could more than treble, crop yields will be up to 4 per cent smaller and tourism could be hit higher temperatures and eroded beaches.

The analysis is included in the Intergenerational Report, adding the challenge of climate change to a picture of softening economic growth in the next four decades stemming from an aging population and slower migration while demand for all forms of care will increase.

Dr Chalmers drew on the analysis to reinforce the government's commitment to help tackle global warming.

"The Intergenerational Report is all about making the big shifts in our economy and our society work for us and not against us," Dr Chalmers said. "We take our responsibility to address climate change very seriously."

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While the global energy transition is expected to drive huge demand for critical minerals, the report cautions the market for Australia's fossil fuels is set to shrink as nations increasingly move to renewable energy sources.

If the global temperature rise is limited to 2 degrees this century, thermal coal exports would halve by 2063. If countries act to limit the temperature increase to 1.5 degrees, such exports would collapse to just 1 per cent of current levels.

Minister for Climate Change and Energy Chris Bowen said the global "climate emergency is not only a moral imperative but regional Australia's jobs opportunity".

"That's we are committed to become a renewable energy superpower."

But Opposition treasury spokesman Angus Taylor rubbished the government's "absurd drip feed stratregy" in feeding out details of the Intergenerational Report over a number of days.

Mr Taylor accused the treasurer of "focusing on what's going to happen in 40 years from now when people right across this country are worried about what's going to happen in 40 hours or 40 days and they want to know what their life is going to be like in 40 weeks time".

"Forty years away is a long, long time for those who are simply trying to make ends meet," he said.