The energy transition will cause big shifts in dependencies – away from oil and other fossil fuels, and towards a raft of critical minerals such as lithium and copper. The question that arises is: Will this trading of places lead to politically and environmentally dangerous futures? This paper offers a broad framework for answering this question. It also suggests that most of the feared new dependencies on critical minerals can be managed. The risks to the global economy that the clean energy transition will create geopolitical tensions over critical minerals – as has happened thus far with oil – are not as great as feared so long as the market forces that govern supply and demand are properly harnessed.
This paper “Energy Transition and Geopolitics: Are Critical Minerals the New Oil?” by World Economic Forum identifies an array of “no regrets” policy initiatives that can help ensure that “trading places” does not have adverse economic and environmental consequences. Among these is helping markets operate more effectively, such as by creating more transparency of data about transactions and the encouragement of forward markets that will make it easier to signal scarcity and finance new supplies.
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