The role of resource scarcity in shaping the green energy mix in the largest rare-earth metal trading nations

The global demand for rare earth metals (REM) has exceeded the global supply, exacerbating the deficit of these resources for wind turbines, solar panels, electric vehicles, and nuclear reactors. The largest REM exporting and importing countries have the power to influence energy transition in their own countries and around the world. This study analyzes the impact of economic growth, financial development, institutional quality, natural resource depletion, and carbon dioxide emissions on the Green Quality of Energy Mix Index (GREENQ) in the 14 largest REM traders in the time period from 2000 to 2021. The impact of variables was assessed with a fully modified ordinary least squares method, and the trade flows were illustrated by the network analysis that showed key REM trade nodes. The results highlight that depletion of natural resources positively affects energy transition in the long term, emphasizing the critical link between resource scarcity and the uptake of renewables. Improved institutions were found to make a positive impact on the green energy mix, while increased carbon dioxide emissions are negatively associated with GREENQ. The study outcomes contribute to the evidence base on energy transition, including resource limitations and REM trade flows.