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Energy Transition Under Mineral Constraints and Recycling

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  • Simon Chazel
  • Sophie Bernard
  • Hassan Benchekroun

Abstract

What are the consequences of primary mineral constraints on the energy transition? Low-carbon energy production uses green capital, which requires primary minerals. We build on the seminal framework for the transition from a dirty to a clean energy in Golosov et al. (2014) [9] to incorporate the role played by primary minerals and their potential recycling. We characterize the optimal paths of energy transition under various scenarios of mineral constraints. Mineral constraints limit the development of green energy in the long run: low-carbon energy production eventually reaches a plateau. We run our simulations using copper as the limiting mineral and we allow for its recycling. In all our scenarios, we find that allowing for mineral recycling delays by 40-60 years the plateau of green capital. After five to six decades, green energy production is 50% lower than in the benchmark model. GDP is 3-8% lower than in the infinite mineral scenario after 30 decades.

Suggested Citation

  • Simon Chazel & Sophie Bernard & Hassan Benchekroun, 2020. "Energy Transition Under Mineral Constraints and Recycling," CIRANO Working Papers 2020s-51, CIRANO.
  • Handle: RePEc:cir:cirwor:2020s-51
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    File URL: https://cirano.qc.ca/files/publications/2020s-51.pdf
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    References listed on IDEAS

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    1. Michael Knoblach & Martin Roessler & Patrick Zwerschke, 2020. "The Elasticity of Substitution Between Capital and Labour in the US Economy: A Meta‐Regression Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 62-82, February.
    2. Knoblach, Michael & Rößler, Martin & Zwerschke, Patrick, 2016. "The Elasticity of Factor Substitution Between Capital and Labor in the U.S. Economy: A Meta-Regression Analysis," CEPIE Working Papers 03/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    3. García-Olivares, Antonio & Ballabrera-Poy, Joaquim & García-Ladona, Emili & Turiel, Antonio, 2012. "A global renewable mix with proven technologies and common materials," Energy Policy, Elsevier, vol. 41(C), pages 561-574.
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    Cited by:

    1. Pommeret, Aude & Ricci, Francesco & Schubert, Katheline, 2022. "Critical raw materials for the energy transition," European Economic Review, Elsevier, vol. 141(C).

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    More about this item

    Keywords

    Energy Transition; Green Capital; Recycling; Circular Economy; Mineral Constraint; Dynamic General-Equilibrium Model;
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