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Centre for International Environmental Studies

Critical Minerals and the Clean Energy Transition

Funding Organisation: Swiss National Science Foundation (SNSF)
Timeline: 2023-2027
Budget: 810'723 CHF


At the COP26 in Glasgow in November 2021, world leaders raised their ambitions in terms of CO2 emissions reductions to meet the goal of limiting global warming to 2°C – and to strive to 1.5°C – by the end of the century. Many countries, including Switzerland, have announced targets of net-zero emissions by 2050, and large emitters such as China and India have voiced similar goals for 2060 and 2070, respectively. Net-zero goals call for a massive and very rapid transition from fossil-fuel to clean energy, implying a four-fold increase in solar and wind energy by 2030 and global sales of electric vehicles raising from 5% today to more than 60% in the next decade. Yet, a major obstacle to the energy transition so far overlooked by economists is the critical reliance of future clean energy systems on a few essential minerals, such as lithium, nickel, cobalt or rare earths elements (REEs), vital to the production of batteries, wind turbines, solar cells, and electric motors. Securing the supply of these critical minerals is thus key to achieve the clean energy transition.

The overall objective of this research project is to examine policy solutions to mitigate disruptions in the supply of critical minerals for the clean energy transition. This will be achieved along two main lines of inquiry.

Our first line of inquiry aims to explore the economic and policy implications of geopolitical challenges for the availability of critical minerals. An important aspect of the supply of critical minerals is that production, reserves and processing of minerals are concentrated in a small number of countries. China for instance accounts for more than 90 percent of global production of rare earths. Russia produces 10% of global nickel and the recent Russian’s invasion of Ukraine already caused nickel prices    a key input to battery production to spike to unprecedented levels threatening to slow down the production of electric vehicles. A direct implication of the high geographic concentration of minerals is that producer countries have the ability to behave strategically along the global supply chain and exercise market power in both upstream mineral markets and downstream clean energy industries. Countries with a large demand and sizeable imports of critical minerals to feed their clean energy industry, such as the US, the EU and Japan, are thus largely dependent from a small group of suppliers and such dependency led to several trade disputes over the last decade.

Our second line of inquiry aims to investigate policy solutions to mitigate environmental challenges posed by the mining and extraction of critical minerals. Additional exploration and mining activities in advanced and developing economies could contribute to raise and diversify the supply of critical minerals. Yet, mounting concerns about the local environmental footprint of mining activities may restrict exploration and raise environmental and clean-up costs for the mining industry, creating thereby vulnerabilities in the supply of critical minerals. Environmental regulations, technological change, and foreign direct investment may contribute to mitigate these impacts.
As minerals supply risks come from political and economic factors rather than from physical scarcity, there is a pressing need for economic analyses to provide a better understanding of how markets for minerals and clean energy are interrelated via international and domestic climate policies, global supply chains, technological change and trade and foreign direct investments linkages. This research proposal, submitted within the framework of a Co-Investigator project between Switzerland and the Netherlands, will build on methods from the environmental economics literature to elaborate novel theoretical and empirical contributions on the role of critical minerals. All three co-applicants are leading environmental economists combining a unique set of skills on natural resources extraction, technological change, trade and investment.
Our research will deliver results on policy solutions to alleviate mineral supply risks for the clean energy transition. These results will be of major interest to the academic community, policymakers and the private sector. Our partnership with leading scholars across various academic disciplines and with key international policy organizations will contribute to enhance the impact of our research. Results will also be relevant for policy making in Switzerland, due to the central role of the commodity-trading sector in the country and the recent failure in a nationwide vote of the ‘Responsible Business Initiative’ calling among others Swiss commodity companies to address environmental challenges of extracting activities.


  • Responsible Project Investigator: Joëlle Noailly, Senior Lecturer, International Economics, Geneva Graduate Institute and Associate Professor, Environmental Economics, Vrije Universiteit Amsterdam
    • Ayse Nihal Yilmaz, PhD Candidate, International Economics and Research Assistant, Centre for International Environmental Studies, Geneva Graduate Institute
  • Project Co-Investigator: Gerard van der Meijden, Associate Professor, Spatial Economics, Vrije Universiteit Amsterdam
  • Project Co-Investigator: Steven Poelhekke, Professor, Spatial Economics, Vrije Universiteit Amsterdam
    • Antonia Kurz, PhD Candidate, Spatial Economics, Vrije Universiteit Amsterdam