Climate change adviser Ross Garnaut has lambasted Australian executives for destroying shareholders' funds in the blind belief China's demand for Australia's big three mining exports would continue to climb.
While they had splurged on ''wasteful overinvestment'', China had been making good on its promise to cut its emissions intensity and had been obtaining iron ore from elsewhere.
''It happens that the Chinese structural change has had its most severe effect precisely on the three commodities which have been at the centre of the Australian resources boom - iron ore, metallurgical coal and thermal coal,'' he told a Melbourne Institute conference.
''The awful reality is that parts of corporate Australia have dissipated shareholders' funds by underestimating the seriousness of Chinese commitments to reduce the emissions intensity of economic growth.''
Speaking at the same conference, Treasurer Wayne Swan warned of a ''savage blow'' to the global recovery unless Republicans and Democrats in the US could agree on a way to prevent a crisis next month when large numbers of tax cuts would expire.
Professor Garnaut said China had exceeded its ambitious emissions targets, cutting coal-fired generation by more than 7 per cent in the past year.
A rapid expansion in hydroelectricity, and wind, biomass, solar and nuclear power had pushed down coal's share of energy production from 85 to 73 per cent.
Australia's iron ore exporters would soon have to compete with massive new Chinese-funded mines in West Africa created in part by Australia's decision to block Chinese investment at home.
Gas and uranium would be far more important to Australia's prosperity than the ''diminished prospects for the staples of the early 21st century'', Professor Garnaut said.
Mr Swan built on his September attack on the ''cranks and crazies'' he said had taken over parts of the Republican Party, saying that the ''looming fiscal cliff'' in the US could plunge it back into recession.