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Clean energy industries and rare earth materials: Economic and financial issues


  • Baldi, Lucia
  • Peri, Massimo
  • Vandone, Daniela


In the last few years, rare earth materials (REM) prices have experienced a strong increase due to geopolitical and sustainability issues. Financial markets could already have factored in concerns about shortages of REM supplies into clean energy companies’ valuations. We use a multifactor market model for the period January 2006 to September 2012 to analyze the impact of REM price trends – specifically dysprosium and neodymium – on six clean energy indices (NYSE–BNEF) tracking the world's most important companies in the clean energy sector. The results show that during period of price increase, there is a negative relationships between REM price changes and the stock market performance of some clean energy indices. The European clean energy index is also negatively affected, and this effect could be relevant to policy makers, considering that Europe is implementing some relevant policy actions to support the development of the clean energy industry.

Suggested Citation

  • Baldi, Lucia & Peri, Massimo & Vandone, Daniela, 2014. "Clean energy industries and rare earth materials: Economic and financial issues," Energy Policy, Elsevier, vol. 66(C), pages 53-61.
  • Handle: RePEc:eee:enepol:v:66:y:2014:i:c:p:53-61 DOI: 10.1016/j.enpol.2013.10.067

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    References listed on IDEAS

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    Cited by:

    1. repec:spr:minecn:v:30:y:2017:i:3:d:10.1007_s13563-017-0114-y is not listed on IDEAS
    2. Beganovic, Nejra & Söffker, Dirk, 2016. "Structural health management utilization for lifetime prognosis and advanced control strategy deployment of wind turbines: An overview and outlook concerning actual methods, tools, and obtained result," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 68-83.
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    4. repec:eee:jrpoli:v:52:y:2017:i:c:p:349-357 is not listed on IDEAS
    5. McCombie, Charles & Jefferson, Michael, 2016. "Renewable and nuclear electricity: Comparison of environmental impacts," Energy Policy, Elsevier, vol. 96(C), pages 758-769.
    6. Baldi, Lucia & Peri, Massimo & Vandone, Daniela, 2016. "Stock markets’ bubbles burst and volatility spillovers in agricultural commodity markets," Research in International Business and Finance, Elsevier, vol. 38(C), pages 277-285.
    7. Han, Aiping & Ge, Jianping & Lei, Yalin, 2016. "Vertical vs. horizontal integration: Game analysis for the rare earth industrial integration in China," Resources Policy, Elsevier, vol. 50(C), pages 149-159.
    8. Apergis, Emmanuel & Apergis, Nicholas, 2017. "The role of rare earth prices in renewable energy consumption: The actual driver for a renewable energy world," Energy Economics, Elsevier, vol. 62(C), pages 33-42.
    9. repec:gam:jsusta:v:10:y:2018:i:1:p:235-:d:127378 is not listed on IDEAS

    More about this item


    Clean energy industry; Rare earth materials; Stock prices;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other


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