It’s just after 6pm on a Monday evening in the small New South Wales South Coast town of Batemans Bay, and as is the case most weeknights – especially drizzly, prematurely dark ones like this – the main shopping area is rapidly emptying. Just a handful of people remain, pushing laden trolleys down the ramp outside the supermarket in a rush to get home. Yet outside a small cinema above a shopping arcade, a procession of car headlights is nosing their way in to the car park.

Standing at the entrance to the Perry Street Cinema, screen director Damon Gameau is greeting a line of people filtering in to see his new film, Regenerating Australia. An out-of-towner, Gameau doesn’t fully comprehend what an unusual sight this is – the event is sold out – but says it was like this at the previous evening’s screening in the southern highlands town of Bowral, along with the dozen or so regional Victorian towns he’s also taken the film. The film will continue its national roadshow until mid-May.

“There’s just this thirst for optimistic story,” he says. “And legitimate muscular ones, not a utopian fantasy, but a sense of a vision of what we could strive for.”

Gameau’s style of film-making brings together the unlikely companions of catastrophic climate crisis and hope. His 2019 documentary 2040, framed as a letter to his four-year-old daughter, explores various solutions for climate mitigation and visualises the positive scenarios he believes could eventuate if these things are rolled out at scale. The response – Gameau says crowdfunding of projects started, and two million copies of the educational materials produced with the film were downloaded – convinced him that optimism is more motivating than gloom.

“If you’re going to sound the fire alarm, you’ve got to show people where the exits are,” he says. “And there aren’t enough narratives showing those exits.”

Inside the cinema, attendees span all ages, from school-age children through to grey heads. There’s a local GP, an oyster farmer, and members of various local community groups. A dance troupe from the local Walbunja people of the Yuin nation perform, Wand when they greet the audience in Dhurga, a blonde-headed girl licking a choc-top yells back “Wallawani” and pumps her hand in the air.

Before the film plays, Gameau talks about his vision, how “to achieve sustainability we need to regenerate”. As he speaks, calls of “yeeeew!” and “boom!” come from the crowd, the audience giving the impression of not so much being thirsty for what he has to say, but outright starving. This is a community particularly attuned to the realities of the climate crisis – the fires of 2019-2020 came within a few hundred metres of the cinema, hundreds of homes in adjoining suburbs were lost, and many other homes are exposed to coastal inundation.

The film is set in December 2029. A hybrid of mockumentary and documentary, it takes the shape of a TV news report, looking back on a decade where First Nations sovereignty is recognised, a federal anti-corruption commission introduced, and Australia undergoes a rapid energy transition. The economy is booming as Australia runs on 90% renewables and exports green steel; individuals communities have energy security and cheap power from their own micro-grids; tenants lower their power bills by renting solar panels from other roofs; and electric vehicle owners earn cash by using their batteries as storage for the grid.

Afterwards, in the Q and A session, it becomes clear that many ideas in a similar vein are already happening here: solar bulk buying, seaweed farming, and a “repair cafe” to encourage recycling of household products.

Gameau is excited by the evidence of this kind of grassroots activity. “You look at the abolitionists, look at the human rights movement, they were all done by communities or groups of people that got together,” he says. “We’ve got to teach our leaders how to lead.”

However, as one local, a man who lost his home in the bushfires and is now a climate activist, points out to the crowd, there is also a possible shortcut. While there’s some “terrific ideas and energy in the room” he says, “in the next few weeks we can make this a lot easier … the most effective thing we can do with our time in the next few weeks is letter-boxing … not for political parties, but to get local voters to prioritise climate and to think about the future they want when they vote.”

Gameau thinks this groundswell of determination to act on the climate crisis that he sees in communities is inexorable – nudged along by the worsening weather. He’s noticed that interest in 2040 spikes every time there is a natural disaster.

Gameau too, is feeling this nudging. His home, where his wife and daughters are now, is in the Northern Rivers, where floods have decimated communities and, even as the film plays in Batemans Bay, a new evacuation warning comes in for Lismore.

“We all have had some really emotional days … my wife has really been on the frontline of this,” he says. “Obviously I spend so much time in this space and a lot of it is optimistic, but I still have days where I feel the reality of where we’re at.’ He says that in the wake of the first Lismore floods, he was on a plane when he heard the news about the record heatwave in Antarctica – with temperatures nearly 40 degrees above average – and he “just burst into tears.”

While Gameau understands the catastrophic consequences of these changes to the climate, as a storyteller, he wants to keep leaning towards – in the words of America essayist, Rebecca Solnit – finding “hope in the dark”.

“I think we are losing a lot of people to nihilism, or they are just tuning out and watching blockbusters and not actually engaging any more, which is really dangerous,” he says.

Gameau draws inspiration from what’s known as the Stockdale paradox – a concept that comes from the experience of US naval officer, Admiral Jim Stockdale, who endured over seven years of captivity as a prisoner during the Vietnam war by simultaneously accepting the brutal realty of his situation while maintaining a robust optimism.

“I think it’s so perfect for this moment,” says Gameau. “It’s this, ‘yeah, don’t shy away from the reality. It’s bleak’. But let’s also focus on all the exciting things we could do, because I think we’re going to have to regenerate regardless.”

As the event at Batemans Bay ends, one woman walks out of the cinema and stretches her arms up into the night sky. “My god. I so needed that,” she says of the film. People are slow to depart, lingering in the foyer and at the top of the staircase, talking animatedly and swapping stories and phone numbers. Eventually, the cinema proprietor, broom in hand, politely tells everyone they have to go now, as he turns off the last light.

“I bet you don’t have to do that when people come to see Batman,” jokes Gameau, and the cinema owner smiles and agrees.

• Regenerating Australia is touring cinemas across Australia now.