Norway, where both of my daughters were born, was not an exceptionally prosperous nation before 1969. That changed when they struck oil in the North Sea that year. In Norway, each child is now born with a national inheritance that individually runs into the hundreds of thousands of dollars, and collectively now stands at over US$2tn dollars. This is thanks to a far-sighted government decision to establish a sovereign wealth fund (colloquially known as “the oil fund”) that now controls the equivalent of 1.5% of all shares in the world’s listed companies.

Norway turned luck into an investment strategy. Australia – as Donald Horne would perhaps have said – relied on simply being the “lucky country”. Or perhaps more accurately, as the British economist Richard Auty has put it, we have succumbed to what he calls “the resource curse”, meaning we allowed the resource industry to crowd out others, becoming too reliant on it along the way.

It is never too late to ensure a nation is profiting appropriately from its industries (not just at times of windfall profits). Nothing stays the same forever and the best companies and the best countries adapt. Their success is often determined by whether they do so proactively or are forced to when it is all too late. And with the vast majority of the world, including all of our major trading partners in Asia, signed up to a decarbonised economy, we would be mad not to at least partly take them at their word.

The worst thing we can do right now is go slowly. China and other markets will not wait for us – in fact, when it comes to China, we may only have a critical decade to capture and milk the opportunity with things like green iron and green steel.

Industrial transitions don’t wait for governments. Supply chains, standards, financing models and customer bases will be decided elsewhere if we hesitate. We need to capture market share, and we need to shape the rules of the game.

The Future Made in Australia agenda adopted by the Albanese government recognises that public finance and strategic prioritisation have a role to play in shaping that future. But the next wave of our green industrial policymaking needs to also be explicit about people and place – which means focusing on middle Australia. It needs to embed labour standards, prioritise legacy industrial and mining regions, and make training and education automatic rather than aspirational – just as the oddly named Inflation Reduction Act in the US did so well.

If you want a litmus test for whether this is working, don’t worry about the statistics. All you should have to do is ask someone in one of these regions if their town is growing or shrinking, whether their kids will stay once they grow up, whether there is enough work to keep local businesses alive and whether the future feels predictable.

Trade policy can sound remote until its consequences reach the household. But what we export determines what kind of jobs we create, the kinds of wages those jobs can sustain, and the tax base that will fund our schools, hospitals and infrastructure. An economy largely based, as it is now, on raw commodity exporting might generate good revenue, but it provides very few jobs per dollar and subjects us to boom and bust cycles. In contrast, value-added exports generate more employment, create steadier income and provide a much broader base of economic activity.

A good national prosperity strategy won’t therefore just replace one industry with another; it will restore confidence across middle Australia along the way.

Workers especially should not fear this transition. That sounds easy to say and hard to justify, which is why we need to do more to demonstrate there can be upwards mobility in this transition – not simply sideways movement, and certainly not downwards mobility.

So, what we really need to do in Australia is move beyond abstract assurances and into visible, funded pathways. Re-skilling must be paid. Prior skills must be recognised. Wage guarantees can be signals of seriousness.

A fitter or an electrician moving from a coal-powered facility into a green steel or hydrogen plant should not be asked to accept lower pay or diminished status.

Those who favour the status quo are not on the side of the workers involved. But we can change that.

The greatest risk Australia faces is the world we live in right now, where fossil fuel markets are eroding and we may be jolted into a new reality. All it will take is for coal demand to decline faster than expected, iron ore prices to come under pressure as steel decarbonises elsewhere, and Australia to remain locked into exporting raw materials as markets become carbon-constrained, and our economy will be in big trouble.

Government coffers may not dry up overnight, but they will begin to deplete. Just as regions will continue to be hollowed out and public services increasingly squeezed.

Doing nothing is really no choice at all. Because that would mean accepting lower growth, higher volatility and fewer options over time. It leaves Australia exposed to forces it no longer controls, and asks middle Australia to absorb the adjustment through insecure work and shrinking job prospects, declining regional prospects as people move away, and a reduced sense of economic agency.

Think about that next time someone channels the Black Knight from Monty Python and insists that the downward trajectory for coal is merely a flesh wound.

• This is an edited extract from Power, Prosperity & Planet: Climate & Energy Policy for All by Thom Woodroofe, part of the In the National Interest series out now through Monash University Publishing