Strong government investment responding to climate change could create a million more jobs over the next two decades.

The strongest jobs growth would be in construction and services industries, new modelling from the Australian Conservation Foundation and the ACTU finds.

Even taking a medium level of action would create almost 380,000 more jobs by 2040, the Jobs in a Clean Energy Future report released on Wednesday says.

Medium action would entail a $10 billion annual budget for emissions reductions – funded by a “modest carbon price” – that would be spent on projects and technologies like renewable energy generation and battery storage, electric vehicles, and public transport.

The strong action scenario modelled would have the government invest even more money in similar projects plus general energy efficiency and the development of biofuel.

Increased investment in public transport, road construction and building infrastructure for electric vehicles would create some 190,000 construction jobs, the report says.

Other jobs could be created in areas like retrofitting houses and offices to be more energy efficient.

ACTU president Ged Kearney says these things don’t just create more jobs, they’re good for communities and the environment.

“Credible and enduring climate and energy policies will create one million new jobs and unlock billions in investment in clean energy and technologies – but government leadership is essential,” she said in a statement.

ACF chief executive Kelly O’Shanassy said the transformation to cleaner energy was already happening but without national leadership it could be chaotic and disruptive.