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Context: The overlapping effects of the Russian invasion of Ukraine, covid-related supply chain disruptions and high inflation have all led to narratives that the clean-energy transition will be highly inflationary—or that it will stall.
The worries usually centre on the implications of soaring demand for commodities such as cobalt, lithium, nickel and copper that are used for electric vehicles (EV), solar cells, wind turbines and electrical grids.
The pitfalls of emission cuts must be seen in a broader context. A rush for minerals to build the new energy infrastructure is only a temporary problem.
What are the problems cited?
The International Energy Agency (IEA), highlights that an EV uses six times as much metals as a fossil fuel car and that wind farms use nine times as much as a gas-fired plant.
Some mines for the metals and minerals used in zero emissions energy systems will take years to come online. The IEA estimates four to seven years for lithium, depending on whether it is in Australia or South America. Copper mines can take well over a decade. It’s easy to see that this could be a problem if demand ramps up unexpectedly fast.
What is the issue with this type of analysis?
The shock value of that analysis doesn’t entirely withstand scrutiny.
Firstly, it fails to acknowledge the absence of fuel from the equation. For eg: an internal combustion pickup truck will use $25,000 of fuel in a decade, under a low gasoline price scenario.
Secondly, it fails to consider the economics of demand and supply. More demand and higher prices will engender more supply.
Thirdly, running out of commodities is a popular fear, but the past couple of hundred years have seen humans develop ever more efficient ways of finding things they want under the ground and pulling them out. Examples: Consider the US shale oil boom of the past decade: the country’s oil output more than doubled between 2008 and 2018. Both the ‘resources’ and the economically recoverable ‘reserves’ of transition minerals have tended to grow over time, even as production continues.
Fourthly, innovation also helps on the demand side. Electric car batteries today use far less cobalt than they did a decade ago, and researchers are confident in the prospects for doing without that scarce mineral altogether.
Source: This post is based on the article “The world is short of time and not minerals for climate action” published in Livemint on 2nd May 22.