by Gary Gardner
In congressional testimony last November, Isabel Munilla, an official from the Department of Energy, gave an alarming assessment of U.S. reliance on foreign minerals. For 31 of 50 critical minerals, she warned,”…the U.S. relies on other countries for more than 50 percent of our requirements…Our reliance on non-allied foreign sources for these materials is neither sustainable nor secure.” Munilla employed what we might call the “scarcity scare”—the panic that supplies of critical minerals may be insufficient for all nations to participate in the transition to clean, sustainable economies.
It is, indeed, a scary thought. Many governments, under pressure to meet the climate obligations agreed to in Paris in 2015, have made renewable energy, electric vehicles, and other low-carbon technologies central to the future of their economies. Leaving some countries out of the transition will be bad for them and bad for the planet.
It’s also worrisome if the hand-wringing around scarcity portends conflict among nations scrambling to secure supplies. Adjectives like “strategic” and indeed “critical” suggest that the minerals are worth fighting over. The Director of the Wilson Center’s Environmental Change and Security Program observes that very quickly, “access to critical minerals has risen to a national security priority in the US.”
Seemingly overnight, technologies that analysts have long touted as great for greening the economy—renewable energy and pollution-free mobility—now cast an ominous shadow as sources of potential global conflict.
But are our choices so constrained? Is our future so binary: either an unstable climate because we lack the materials needed for clean technologies, or resource wars as nations fight for grams of samarium and molybdenum?
It seems to me short-sighted to insist that the glass is half empty. Sure, the situation is worrisome if we start by assuming a planet of ever-growing economies. But change the starting assumption to a global community committed to a steady state economy, and the picture brightens considerably.
The Scarcity Case
Supply concerns surrounding critical materials emerge for several reasons. First, critical minerals used in the clean energy transition are in greater demand than in economies built on fossil fuels. Consider that a typical electric car requires six times the mineral inputs of a conventional car, and an onshore wind plant requires nine times more mineral resources than a gas-fired plant, according to the International Institute for Sustainable Development.
In all, the World Resources Institute reports that five critical minerals are needed for rechargeable batteries, five for electric vehicle motors, ten for wind turbines, and two for power lines. Their broad use is part of the reason they’re considered critical. The other reason, according to the U.S. Geological Survey, is that they have “a supply chain vulnerable to disruption.”
Supply vulnerability increases with growth in demand, which is what many analysts see ahead.
Supply disruption becomes still more plausible when we factor in the particular sources of supply, as critical minerals are often concentrated in a few countries. Indonesia, Chile, Peru, China, and the DRC, along with the Philippines, are the primary sources of critical materials, while processing activity is heavily concentrated in China. The concentrated nature of these supplies gives supplier nations leverage over the terms of trade.
Of course, recycling can help to augment supplies, but analysts are clear that recycling will be insufficient to meet demand. Even if we achieved 100% end-of-life recycling (which is thermodynamically impossible), recycled materials would meet only 60 percent of 2050 demand. Among the obstacles to the highest levels of recycling is the difficulty of recycling metals that are mixed with other materials. In addition, some recycling is labor-intensive and involves the use of hazardous chemicals and heat; work would likely be done in low-wage nations that may have insufficient worker safeguards.
The bottom line is that these minerals are often not abundant enough to preclude the punishing prices arising from the projected demand. The International Energy Agency estimates that supply from existing mines and those under construction could meet only half of projected lithium and cobalt requirements and 80% of copper needs by 2030. Other sources see rapidly accelerated demand for critical materials like graphite, lithium, and cobalt, ranging from a sixfold increase by 2050 (according to the World Bank) to a 20–40 times increase (International Energy Agency).
The scarcity scare has governments on their toes. The USA, often described as resource-rich, lists 50 minerals as critical, at least ten of which are essential to the transition to a clean economy. For eight of those ten, the USA depends on imports for more than three quarters of its supply.
China is concerned, too, for similar reasons. Xi Jinping has promised to phase out production of internal combustion engines by 2035 and the Chinese government worries about the supply of key minerals like lithium, of which Australia is a major producer. In July 2023, China introduced export controls on two critical minerals, gallium and germanium, apparently to conserve its stocks. China supplies 54 percent of U.S. demand for these minerals.
|Supplier share of total global supply (%)
|Democratic Republic of the Congo
|Australia, Chile, China
|Turkey, Brazil, China
|Indonesia, Russia, Philippines
Europe and the USA have also acted to secure supplies. The EU’s Critical Raw Materials Act, for example, streamlines the permitting process for mining, which has resulted in approval of Europe’s first lithium mine, in Portugal. In the US, the Inflation Reduction Act seeks to increase domestic sourcing of critical minerals for use in electric vehicles, batteries, and renewable power.
Meanwhile, supplier countries are gearing up to ensure that they get a fair share of the revenue they will earn in the scramble for critical minerals. The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), with more than 80 member countries, works to promote policies and regulations in the mining sector; for example, by ensuring that a larger share of mineral processing happens in the source country, and to promote international cooperation on taxation of the mining sector.
A Better Way Forward
Supply-side concerns could be significantly diminished with a reduction in demand. Yet this solution seldom comes up in discussions of the critical minerals challenge. (as googling will corroborate). Decreased demand for private electric vehicles and electricity would translate to less pressure on critical material supplies. The World Wildlife Fund suggests that a policy of curbing demand could reduce overall materials needs by more than 50% between now and 2050.
Reducing consumption begins not with sacrifice, but with eliminating redundancy in our consumption patterns. The World Economic Forum reports that 39 percent of workers globally have employer-provided mobile phones or laptops. It recommends that manufacturers configure devices to provide user profiles that sharply distinguish work and personal use. Voila! A substantial reduction in demand for phones and laptops, and the materials that power them.
Meanwhile, car-sharing advocates have long recognized that most cars spend 95 percent of their day parked, a highly inefficient use of the materials in them. In the case of electric cars (which constitute a rapidly growing share of the global fleet), these are often critical materials. Imagine every two-car household replacing one car with a combination of car-sharing, public transportation, biking, and walking. Analysts project that car-sharing alone will increase by more than 20 percent annually to 2032. Suppose this could reduce the global car vehicle fleet by 25 percent (not 50 percent, as many households have only one car). Such a shift would reduce substantially the demand for critical minerals for electric vehicles.
Is living with one car a sacrifice? Not in my case. Like many steady staters, I bike to work daily, reducing our family’s car needs to a single vehicle. Fresh air and beautiful scenery are welcome bookends to my workdays. My waistline is thinner, and my wallet fatter, because of our “sacrifice.” Would that all sacrifice were so enjoyable! Of course, occasionally my wife and I want our sole car at the same time. In those cases, we work it out, which is good for marital solidarity. In sum, I struggle to find the sacrifice in our experience.
Another way to reduce demand is to sign up for a subscription phone service, if you can find one. Fairphone in the Netherlands provides incentives for people to keep their phone in good condition over a long period. When it wears out, users send the phone back to Fairphone for repair, refurbishment, or materials recycling. The subscription model means Fairphone has a strong incentive to offer phones that they can easily disassemble and reuse over and over. If all phone companies (and other high-tech companies) were to use such a model, the need for minerals in electronics would surely plummet.
Finally, consider purchasing products designed for longevity. Smart phone makers today (among many other merchants) are shameless in incentivizing sales of new devices, even to owners holding a perfectly functional one (Upgrade today!). Best to help shape the market by shopping with companies that sell durable products instead. One such e-commerce site, Buy Me Once, features products that the company judges to be durable, including some electronics.
Sustainability has long held the quiet promise of yielding not only environmental and social benefits, but a precious dividend as well. It promises greater international collaboration toward a shared prosperity, and ultimately, the material foundation for a peaceful world. “Steady statesmanship in international diplomacy,” as Brian Czech called it in Supply Shock. Collaboration on building clean economies worldwide could be a robust step in that direction. But achieving this requires ending the scarcity scare, loosening our resource grip, sharing the abundance that surrounds us, and committing to the steady state economy.
Gary Gardner is CASSE’s Managing Editor.