Governments around the world are busy designing policies with a dual objective; economic reactivation in response to the recession brought by the pandemic and meeting commitments to reduce carbon dioxide (CO2) emissions. This implies a considerable increase in investments in digitization and in so-called green technologies, but also a greater use of natural resources such as metals.
Green technologies, including renewable energy and electric vehicles, and the expansion of telecommunications networks, require more metals than their coal- and oil-based counterparts.
In a report published in May this year, the International Energy Agency (IAE) notes that since 2010 the average amount of minerals needed by a new unit of power generation capacity has increased by 50% to As the share of new investments in renewable energy has increased.
According to IAE, a conventional car uses 33.5 kg per vehicle of metals, mainly copper and manganese, while an electric car uses in total more than 200 kg per vehicle of at least 6 different metals. To produce a megawatt with natural gas, 1,150 kg of metals are needed, while to produce it with offshore wind energy, more than 15 tons of metals are needed.
Minerals such as lithium, cobalt, manganese, and graphite are crucial to the performance and durability of batteries. Electrical and telecommunications networks, at the center of a digital economy, need large amounts of copper and aluminum. Rare metals are important components in the production of magnets and catalytic converters used in wind turbines.
The adoption of energy sources with a lower carbon footprint is increasing demand for minerals so much that there is already talk of a super cycle in the raw materials market possibly more pronounced than that triggered by rapid economic growth in China this century. If the supply of minerals does not adequately match demand, we may see a sustained increase in prices and a slowdown in the energy transition.
However, a rise in mineral prices and the need to diversify in the portfolios of industries dedicated to fossil fuels should not be the only concern. The accelerated extraction of minerals to satisfy the demand generated by green technologies entails an increase in the use of energy that comes from hydrocarbons and, as in the case of lithium, from an enormous use of water in areas, such as Sonora, where the resource is already at crisis levels.
In addition, many of the producers of these metals have their own social and economic challenges such as the Democratic Republic of the Congo and its association with the production of cobalt using child labor.
Efforts to reduce carbon emissions require a better understanding of how to calculate the carbon footprint in the development of alternative technologies and the social and environmental impact of this process. Energy policies must be consistent with the environmental problems they are supposed to solve. If the manufacture of green technologies produces higher levels of carbon emissions than those that would be avoided by its operation, the benefit would not be for the environment or society, but for the industry involved in the development of these technologies. The climate problem is very complex and is directly related to the use of energy, we must start by rapidly reducing the demand for energy through changes in our consumption patterns and increase our understanding to choose alternatives that really generate lower emissions.
Actuarial by UNAM
Guest column
Lucía Buenrostro is a Master in Economics from El Colegio de México and a Master in Mathematics and Finance from Imperial College (United Kingdom). She has a PhD in Economics from the University of Warwick (UK). He has performed teaching and research work at UNAM, at the University of Warwick and at the University of Oxford.
He has a broad and solid track record in the international financial system where he worked for almost 15 years in London as head of risk management areas in investment banking.
Reference-www.eleconomista.com.mx