New modelling by the CSIRO has found Australia can enjoy strong economic growth without damaging the environment, provided new technology and policies are embraced.
The research, published in the journal  Nature on Thursday, presented 20 scenarios involving economic growth and environmental change in Australia.
Lead researcher Steve Hatfield-Dodds said Australia could make "great progress towards sustainable prosperity" without a shift in societal values if it decided to. 
"This is a head-on argument with those people who put forward the view we cannot have economic growth and environmental sustainability at the same time," he said.
"We are not making any recommendations but we are saying the future could be very different to the past and in many cases with well-informed choices, we could turn challenges and risks into opportunities."
The report, which was produced with the Potsdam Institute for Climate Impact Research in Germany, found sustainable prosperity was possible but would not happen automatically.
Some scenarios found greenhouse gas emissions would fall to zero by 2040, with living and economic standards continuing to rise.
"Many of the 20 scenarios we explored would represent substantial progress towards sustainable prosperity," the report says. 
"Australia could begin to repair past damage; restoring significant areas of native habitat and achieving negative emissions of greenhouse gasses.
"Australian emissions per capita could fall below the global average by 2050, from four times the global average today."
The report found up to half of emission reductions could be achieved by creating large plantations of local natives nationwide.
With water demand set to increase, the report found 32-56 per cent of needs could be met by desalination programs in coastal cities and water recycling for industrial use.
"Economically, Australia can achieve strong economic growth to 2050 indicated by rising gross domestic product and gross national income per capita, in scenarios where environmental pressures fall or are stable," the report says. 
"In all scenarios, Australia's economy and living standards are projected to grow strongly."
Dr Hatfield-Dobbs said Australians would not have to sacrifice quality of life or prosperity provided technology and policy changes were embraced by political and business leaders.
"Reducing environmental pressures will not require a shift in societal values but neither will technology deliver it automatically," he said.
"This is not about lifestyle choices in a moral sense or the need to be better people. Instead it is about developing the right technology and making good decisions at a policy level"
Dr Hatfield-Dobbs would not comment on the political leadership on climate change policy but said the report had already been welcomed by business and industry leaders.
"We have been talking to lots of people about the report and we have seen enthusiasm from all concerned.
"Our reading is people are hungry for a conversation about the future of Australia and our impression is they welcome the report"
Professor David Stern, director of International and Development Economics at the ANU's Crawford School of Public Policy, said the study found policies capable of abating greenhouse emissions did not have to prevent economic growth. 
"The surprising finding in the paper is that there are scenarios where the economy doesn't just continue to grow under a strong climate policy but that income per person is actually higher than under current trends," he said. 
"This seems to be because Australia gains from changes in the global economy under the strong climate policies."