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Energy Transition Metals

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  • Lukas Boer
  • Mr. Andrea Pescatori
  • Martin Stuermer

Abstract

The energy transition requires substantial amounts of metals such as copper, nickel, cobalt and lithium. Are these metals a key bottleneck? We identify metal-specific demand shocks, estimate supply elasticities and pin down the price impact of the energy transition in a structural scenario analysis. Metal prices would reach historical peaks for an unprecedented, sustained period in a net-zero emissions scenario. The total value of metals production would rise more than four-fold for the period 2021 to 2040, rivaling the total value of crude oil production. Metals are a potentially important input into integrated assessments models of climate change.

Suggested Citation

  • Lukas Boer & Mr. Andrea Pescatori & Martin Stuermer, 2021. "Energy Transition Metals," IMF Working Papers 2021/243, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/243
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    2. Thomas Allen & Mathieu Boullot & Stéphane Dées & Annabelle de Gaye & Noëmie Lisack & Camille Thubin & Oriane Wegner, 2023. "Using Short-Term Scenarios to Assess the Macroeconomic Impacts of Climate Transition," Working papers 922, Banque de France.
    3. Alessi, Lucia & Ossola, Elisa & Panzica, Roberto, 2023. "When do investors go green? Evidence from a time-varying asset-pricing model," International Review of Financial Analysis, Elsevier, vol. 90(C).
    4. Etienne ESPAGNE & Hugo LAPEYRONIE, 2023. "Energy transition minerals and the SDGs. A systematic review," Working Paper ebe0968c-fce0-4ce9-b3b6-b, Agence française de développement.
    5. Committeri, Marco & Brüggemann, Axel & Kosterink, Patrick & Reininger, Thomas & Stevens, Luc & Vonessen, Benjamin & Zaghini, Andrea & Garrido, Isabel & Van Meensel, Lena & Strašuna, Lija & Tiililä, Ne, 2022. "The role of the IMF in addressing climate change risks," Occasional Paper Series 309, European Central Bank.
    6. George Yunxiong Li & Simona Iammarino, 2024. "Critical Raw Materials and Renewable Energy Transition: The Role of Domestic Supply," Discussion Paper series in Regional Science & Economic Geography 2024-04, Gran Sasso Science Institute, Social Sciences, revised Oct 2024.
    7. Francisco Ríos Muñoz & Camilo Peña Ramírez & José Meza & Tenzin Crouch, 2024. "Platinum Group Metals Extraction from Asteroids vs Earth: An Overview of the Industrial Ecosystems, Technologies and Risks," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 37(3), pages 681-700, September.
    8. Ghosh, Bikramaditya & Pham, Linh & Teplova, Tamara & Umar, Zaghum, 2023. "COVID-19 and the quantile connectedness between energy and metal markets," Energy Economics, Elsevier, vol. 117(C).
    9. Agnese, Pablo & Rios, Francisco, 2024. "Spillover effects of energy transition metals in Chile," Energy Economics, Elsevier, vol. 134(C).
    10. Martin Stuermer, 2022. "Non-renewable resource extraction over the long term: empirical evidence from global copper production," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 35(3), pages 617-625, December.
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    12. Zhang, Hongwei & Zhang, Yubo & Gao, Wang & Li, Yingli, 2023. "Extreme quantile spillovers and drivers among clean energy, electricity and energy metals markets," International Review of Financial Analysis, Elsevier, vol. 86(C).
    13. Vlado Vivoda & Ron Matthews, 2024. "“Friend-shoring” as a panacea to Western critical mineral supply chain vulnerabilities," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 37(3), pages 463-476, September.

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    More about this item

    Keywords

    Conditional forecasts; structural vector autoregressions; structual scenario analysis; energy transition; metals; fossil fuels; prices; climate change.; estimate supply elasticity; metals production; aggregate commodity demand shock; price risk; Metals; Metal prices; Copper; Supply elasticity; Global;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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