The Economics of Rare Earths
A 91 page report on the Economics of Rare Earth produced at the UNU Maastricht in June 2014 has been uploaded into the document library. It, and other information on Rare Earth elements, can be accessed via the following link: -
Here is the background and abstract:-
UNU-MERIT Working Papers intend to disseminate preliminary results of research carried out at UNU-MERIT and MGSoG to stimulate discussion on the issues raised.
The aim of this paper by Eva Bartekova, published in June 2014, is to examine the supply risk of rare earths and its impact on low carbon technologies deployment. Bringing together seemingly disconnected strands of scientific literature, this multidisciplinary approach allows to provide an overarching overview of the economics of rare earths. In terms of supply risk, as opposed to the common belief, it is not China’s dominant position per se, but its industrial policies which distort the rare earths market. On the demand side, the results of this paper disprove the widespread allegation that availability risk impedes deployment of off-shore wind. Contrary to this, a potential supply shortage of rare earths would disrupt the further development of the automotive industry and its electrification. Ultimately, uncertainty about volatile prices and threat of supply shortages induce manufacturers to shift away from technologies containing rare earths, and thus render innovation in these economically non- viable.