Mineral import demand and clean energy transitions in the top mineral-importing countries

Abstract

The clean energy transitions require a large volume of minerals to handle its diverse technologies, such as solar photovoltaics (PV), wind turbines etc. Therefore, mineral importing countries concentrated on cleaner energy production confront an uprising trend in critical mineral prices due to thriving demands. We quest for the response of the top mineral importing countries' import demand for minerals to the clean energy transitions from 1996 to 2019 within the import-demand function analysis. Using the cross-sectional autoregressive distributed lag (CS-ARDL) method, our findings divulge a significantly positive response of mineral import demand to solar and wind energy productions in the long run. We also find that mineral price elasticity holds the Marshallian demand hypothesis in the mineral-laden solar energy generation while contradicting it in wind energy production. In addition, the oil price substitution effect does not sustain, whereas exchange rate depreciates mineral import demands in the long run. Therefore, our policy implications encompass optimizing the mineral resources for clean energy transitions to materialize the 21st century's global agenda of a decarbonized or net-zero emissions trajectory.

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