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Mineral Resources for Renewable Energy: Optimal Timing of Energy Production

Author

Listed:
  • Adrien Fabre

    (Paris School of Economics and University Paris 1 Panthéon Sorbonne)

  • Mouez Fodha

    (Paris School of Economics and University Paris 1 Panthéon Sorbonne)

  • Francesco Ricci

    (CEE-M, Univervité de Montpellier, CNRS, INRA, SupAgro, Montpellier, France)

Abstract

The production of energy from renewable sources is much more intensive in minerals than that from fossil resources. The scarcity of certain minerals limits the potential for substituting renewable energy for scarce fossil resources. However, minerals can be recycled, while fossils cannot. We develop an intertemporal model to study the dynamics of the optimal energy mix in the presence of mineral intensive renewable energy and fossil energy. We analyze energy production when both mineral and fossil resources are scarce, but minerals are recyclable. We show that the greater the recycling rate of minerals, the more the energy mix should rely on renewable energy, and the sooner should investment in renewable capacity take place. We confirm these results even in the presence of other better known factors that affect the optimal schedule of resource use: growth in the productivity in the renewable sector, imperfect substitution between the two sources of energy, convex extraction costs for mineral resources and pollution from the use of fossil resources.

Suggested Citation

  • Adrien Fabre & Mouez Fodha & Francesco Ricci, 2019. "Mineral Resources for Renewable Energy: Optimal Timing of Energy Production," Working Papers 2019.06, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2019.06
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    3. Pommeret, Aude & Ricci, Francesco & Schubert, Katheline, 2022. "Critical raw materials for the energy transition," European Economic Review, Elsevier, vol. 141(C).
    4. Rahat, Birjees & Nguyen, Pascal, 2023. "Does ESG performance impact credit portfolios? Evidence from lending to mineral resource firms in emerging markets," Resources Policy, Elsevier, vol. 85(PB).
    5. Han, Zhanbing & Zakari, Abdulrasheed & Youn, Ik Joong & Tawiah, Vincent, 2023. "The impact of natural resources on renewable energy consumption," Resources Policy, Elsevier, vol. 83(C).
    6. Zhou, Sophie & Smulders, Sjak, 2021. "Closing the loop in a circular economy: Saving resources or suffocating innovations?," European Economic Review, Elsevier, vol. 139(C).
    7. Liu, Yang & Dong, Kangyin & Taghizadeh-Hesary, Farhad & Dong, Xiucheng, 2024. "How do minerals affect the global energy transition? Metallic versus non-metallic mineral," Resources Policy, Elsevier, vol. 92(C).
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    9. Aldakhil, Abdullah Mohammed & Nassani, Abdelmohsen A. & Zaman, Khalid, 2020. "The role of technical cooperation grants in mineral resource extraction: Evidence from a panel of 12 abundant resource economies," Resources Policy, Elsevier, vol. 69(C).

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    More about this item

    Keywords

    Renewable and Non-Renewable Natural Resources; Mineral Resources; Recycling; Energy Transition;
    All these keywords.

    JEL classification:

    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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