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On the Politics and Economics of the Shift from Fossil Fuels to Critical Minerals

Author

Listed:
  • Rabah Arezki

    (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne, Harvard Kennedy School)

  • Michael Ross

    (UCLA - University of California [Los Angeles] - UC - University of California)

  • Rick van der Ploeg

    (University of Oxford)

Abstract

The global economy is gradually exiting the era of fossil fuels while entering the era of critical minerals. That shift is coming in handy for fossil fuel dependent economies, which have had difficulty diversifying outside the resource sector. It is, indeed, politically and economically expedient for leaders in fossil fuel dependent economies to diversify within the extractive sector instead of moving beyond it. Yet, the massive technological and geopolitical uncertainties associated with the era of critical minerals will make diversification within the extractive sector risky. Adopting fiscal prudence and long-term contracts for critical minerals can partly mitigate the risk but leave open the need to find sustainable engines for economic growth and jobs.

Suggested Citation

  • Rabah Arezki & Michael Ross & Rick van der Ploeg, 2026. "On the Politics and Economics of the Shift from Fossil Fuels to Critical Minerals," Working Papers hal-05557577, HAL.
    • Handle: RePEc:hal:wpaper:hal-05557577
    Note: View the original document on HAL open archive server: https://hal.science/hal-05557577v1
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