IDEAS home Printed from https://ideas.repec.org/p/hhs/nlsseb/2018_003.html
   My bibliography  Save this paper

How effective is lithium recycling as a remedy for resource scarcity?

Author

Listed:
  • Rosendahl, Knut Einar

    (School of Economics and Business, Norwegian University of Life Sciences)

  • Rubiano, Diana Roa

    (School of Economics and Business, Norwegian University of Life Sciences)

Abstract

We investigate to what extent recycling can remedy resource scarcity, and whether market intervention is desired. For doing so, we develop a dynamic model of the global lithium market. An efficient market for resource waste allows consumers to internalize the waste value when they buy the resource. In the analytical part of our paper, we show that the efficient market can alternatively be realized through a proper set of worldwide subsidies to either buyers or sellers of both virgin and recycled lithium. In our numerical simulations, we find that optimal subsidies may become quite substantial in the second half of this century. The size of these subsidies depends, however, on a number of uncertain assumptions such as technological progress in both extraction and recycling, quality-grade of recovered lithium, and demand elasticity.

Suggested Citation

  • Rosendahl, Knut Einar & Rubiano, Diana Roa, 2018. "How effective is lithium recycling as a remedy for resource scarcity?," Working Paper Series 3-2018, Norwegian University of Life Sciences, School of Economics and Business, revised 16 Apr 2018.
    • Handle: RePEc:hhs:nlsseb:2018_003
    as

    Download full text from publisher

    File URL: https://www.nmbu.no/download/file/fid/31502
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kristine Grimsrud, Knut Einar Rosendahl, Halvor B. Storrøsten, and Marina Tsygankova, 2016. "Short Run Effects of Bleaker Prospects for Oligopolistic Producers of a Non-renewable Resource," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. David Levhari & Robert S. Pindyck, 1981. "The Pricing of Durable Exhaustible Resources," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(3), pages 365-377.
    3. Robert M. Solow & Frederic Y. Wan, 1976. "Extraction Costs in the Theory of Exhaustible Resources," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 359-370, Autumn.
    4. Pittel, Karen & Amigues, Jean-Pierre & Kuhn, Thomas, 2010. "Recycling under a material balance constraint," Resource and Energy Economics, Elsevier, vol. 32(3), pages 379-394, August.
    5. Sylvain Sourisseau & Jean De Beir & Thai Ha Huy, 2017. "The effect of recycling over a mining oligopoly," Documents de recherche 17-05, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    6. Berg, Elin & Kverndokk, Snorre & Rosendahl, Knut Einar, 2002. "Oil Exploration under Climate Treaties," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 493-516, November.
    7. Grant, Darren, 1999. "Recycling and market power: A more general model and re-evaluation of the evidence1," International Journal of Industrial Organization, Elsevier, vol. 17(1), pages 59-80, January.
    8. Donald A. Hanson, 1980. "Increasing Extraction Costs and Resource Prices: Some Further Results," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 335-342, Spring.
    9. Farzin, Y H, 1992. "The Time Path of Scarcity Rent in the Theory of Exhaustible Resources," Economic Journal, Royal Economic Society, vol. 102(413), pages 813-830, July.
    10. Kushnir, Duncan & Sandén, Björn A., 2012. "The time dimension and lithium resource constraints for electric vehicles," Resources Policy, Elsevier, vol. 37(1), pages 93-103.
    11. Yaksic, Andrés & Tilton, John E., 2009. "Using the cumulative availability curve to assess the threat of mineral depletion: The case of lithium," Resources Policy, Elsevier, vol. 34(4), pages 185-194, December.
    12. Bocar Samba Ba & Philippe Mahenc, 2019. "Is Recycling a Threat or an Opportunity for the Extractor of an Exhaustible Resource?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1109-1134, August.
    13. Schulze, William D., 1974. "The optimal use of non-renewable resources: The theory of extraction," Journal of Environmental Economics and Management, Elsevier, vol. 1(1), pages 53-73, May.
    14. Marion B. Stewart, 1980. "Monopoly and the Intertemporal Production of a Durable Extractable Resource," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(1), pages 99-111.
    15. Milton C. Weinstein & Richard J. Zeckhauser, 1974. "Use Patterns for Depletable and Recycleable Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 67-88.
    16. Martin, Robert E, 1982. "Monopoly Power and the Recycling of Raw Materials," Journal of Industrial Economics, Wiley Blackwell, vol. 30(4), pages 405-419, June.
    17. Pashardes, Panos, 1986. "Myopic and Forward Looking Behavior in a Dynamic Demand System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 387-397, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lafforgue, Gilles & Lorang, Etienne, 2022. "Recycling under environmental, climate and resource constraints," Resource and Energy Economics, Elsevier, vol. 67(C).
    2. Ba, Bocar Samba & Soubeyran, Raphael, 2023. "Hotelling and recycling," Resource and Energy Economics, Elsevier, vol. 72(C).
    3. Diana Roa & Knut Einar Rosendahl, 2023. "Policies for Material Circularity: the Case of Lithium," Circular Economy and Sustainability,, Springer.
    4. Compagnoni, Marco & Grazzi, Marco & Pieri, Fabio & Tomasi, Chiara, 2023. "Extended producer responsibility and trade flows in waste: The case of batteries," FEEM Working Papers 338789, Fondazione Eni Enrico Mattei (FEEM).
    5. Bruno Jetin, 2020. "Who will control the electric vehicle market?," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 20(2), pages 156-177.
    6. Terreaux, Jean-Philippe, 2022. "The rise and fall of La Graufesenque: The fate of development based on a non-renewable resource," Ecological Economics, Elsevier, vol. 196(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diana Roa & Knut Einar Rosendahl, 2023. "Policies for Material Circularity: the Case of Lithium," Circular Economy and Sustainability,, Springer.
    2. Ba, Bocar Samba & Soubeyran, Raphael, 2023. "Hotelling and recycling," Resource and Energy Economics, Elsevier, vol. 72(C).
    3. Devarajan, Shantayanan & Fisher, Anthony C, 1981. "Hotelling's "Economics of Exhaustible Resources": Fifty Years Later," Journal of Economic Literature, American Economic Association, vol. 19(1), pages 65-73, March.
    4. Lafforgue, Gilles & Rouge, Luc, 2019. "A dynamic model of recycling with endogenous technological breakthrough," Resource and Energy Economics, Elsevier, vol. 57(C), pages 101-118.
    5. Zhou, Sophie & Smulders, Sjak, 2021. "Closing the loop in a circular economy: Saving resources or suffocating innovations?," European Economic Review, Elsevier, vol. 139(C).
    6. Seyhan, Demet & Weikard, Hans-Peter & van Ierland, Ekko, 2012. "An economic model of long-term phosphorus extraction and recycling," Resources, Conservation & Recycling, Elsevier, vol. 61(C), pages 103-108.
    7. Fabre, Adrien & Fodha, Mouez & Ricci, Francesco, 2020. "Mineral resources for renewable energy: Optimal timing of energy production," Resource and Energy Economics, Elsevier, vol. 59(C).
    8. Hart, Rob, 2016. "Non-renewable resources in the long run," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 1-20.
    9. Bocar Samba Ba & Philippe Mahenc, 2019. "Is Recycling a Threat or an Opportunity for the Extractor of an Exhaustible Resource?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1109-1134, August.
    10. Gérard Gaudet, 2007. "Natural resource economics under the rule of Hotelling," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1033-1059, November.
    11. Lin, C.Y. Cynthia, 2009. "An Empirical Dynamic Model of OPEC and Non-OPEC," Working Papers 225895, University of California, Davis, Department of Agricultural and Resource Economics.
    12. Sylvain Sourisseau & Jean De Beir & Thai Ha Huy, 2019. "The effect of recycling over a mining oligopoly: competition for market shares, collusion for market power within a Cournot-Stackelberg model," Documents de recherche 19-01, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    13. Ghandi, Abbas & Lin, C.-Y. Cynthia, 2012. "Do Iran’s buy-back service contracts lead to optimal production? The case of Soroosh and Nowrooz," Energy Policy, Elsevier, vol. 42(C), pages 181-190.
    14. Pickering, Andrew, 2008. "The oil reserves production relationship," Energy Economics, Elsevier, vol. 30(2), pages 352-370, March.
    15. De Beir, Jean & Fodha, Mouez & Magris, Francesco, 2010. "Life Cycle Of Products And Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 14(2), pages 212-230, April.
    16. Richa, Kirti & Babbitt, Callie W. & Gaustad, Gabrielle & Wang, Xue, 2014. "A future perspective on lithium-ion battery waste flows from electric vehicles," Resources, Conservation & Recycling, Elsevier, vol. 83(C), pages 63-76.
    17. Fernando Moreno-Brieva & Carlos Merino, 2020. "African international trade in the global value chain of lithium batteries," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(6), pages 1031-1052, August.
    18. Okullo, Samuel J. & Reynès, Frédéric & Hofkes, Marjan W., 2015. "Modeling peak oil and the geological constraints on oil production," Resource and Energy Economics, Elsevier, vol. 40(C), pages 36-56.
    19. Quentin Grafton, R. & Kompas, Tom & Van Long, Ngo, 2012. "Substitution between biofuels and fossil fuels: Is there a green paradox?," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 328-341.
    20. Gil-Alana, Luis A. & Monge, Manuel, 2019. "Lithium: Production and estimated consumption. Evidence of persistence," Resources Policy, Elsevier, vol. 60(C), pages 198-202.

    More about this item

    Keywords

    Natural Resource Economics; Exhaustible resources; Minerals; Recycling;
    All these keywords.

    JEL classification:

    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:nlsseb:2018_003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Frode Alfnes (email available below). General contact details of provider: https://edirc.repec.org/data/ioumbno.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.