How Sustainable is the Critical Mineral Supply Chain? Evidence from the Critical Mineral Supply Chain Controlling Economies

Critical minerals have emerged as important resources in the production of renewable energy technologies that are fundamental to the attainment of net-zero emissions across the global economy. This chapter seeks to use data from critical minerals-endowed economics to evaluate the socioeconomic (GDP per capita and income inequality) and environmental (carbon emissions and ecological footprint) implications of the critical mineral supply chain. The findings based on the wavelet coherence analysis show that the production of critical minerals such as copper, cobalt, graphite, lithium, nickel, and rare earths contributes significantly to environmental degradation in the form of increasing carbon emissions and ecological footprint. The findings also show that copper, cobalt, graphite, lithium, nickel, and rare earths have significant socioeconomic implications in increasing GDP per capita and widening income inequality. These findings highlight that the desire to rely on critical minerals to support energy transition and net-zero agenda comes with significant environmental and socioeconomic (income inequality) costs. These findings call on policymakers in critical mineral-endowed economies and economies with higher demand for these critical minerals to design and implement policies that would ensure sustainability in critical mineral supply chains.