In such a situation, international locations would agree to advertise international knowledge-sharing round inexpensive inexperienced applied sciences, sustainable environmental and moral requirements within the mining and processing of inexperienced metals, international useful resource governance, and sharing of geoscience knowledge.
Sadly, the Ukraine warfare and heightened US-China tensions seem to have made this feature unworkable for the close to time period.
As an alternative, many international locations have woken as much as their overreliance on China for crucial inexperienced metals. China is chargeable for 60 per cent of the worldwide manufacturing of uncommon earth metals and dominates the downstream processing phases of a number of crucial minerals mined elsewhere.
Considerations over China’s dominance of those crucial provide chains have arisen largely as a result of it has leveraged this up to now to additional its strategic goals. As an example, in 2010, Beijing all of the sudden reduce the worldwide provide of uncommon earth metals exports – which led to a surge of their general costs – whereas stopping exports to Japan altogether over a bilateral maritime dispute.
Extra lately, in 2019, China threatened a curtailment of uncommon earth metals exports as a counter to the US within the commerce warfare.
Stating these info will not be meant to put the blame on China for heightened tensions with the US. A parallel will be drawn with the US greenback, as Washington has been identified to weaponise the greenback cost system. Neither nation is an harmless sufferer within the great-power blame recreation.
Within the case of the clear power transition, given the rising geopolitical dangers, many international locations have chosen to scale back their metals import dependency on China by diversifying provide chains to make sure better power resilience. As an example, after the shock of the curtailment of uncommon earth metals imports from China in 2010, Japan labored with Australia and Vietnam to enhance the extraction and processing of those metals.
Different international locations have additionally begun to undertake power safety insurance policies corresponding to strengthening home provides of sure crucial metals and supplies, and providing beneficiant subsidies to advertise different renewables as a part of formidable new inexperienced offers. Essentially the most notable instance is the passing of the Inflation Discount Act by the US in August, which guarantees substantial subsidies and credit score to the non-public sector for the event of unpolluted power industries.
The priority with such unilateral methods is the inefficiency related to aggressive subsidies to make home manufacturing extra engaging. Such beggar-thy-neighbour subsidy insurance policies additionally gas accusations of unfair commerce practices and will immediate retaliation from different international locations.
This isn’t simply an summary chance. The EU, Japan and South Korea have complained publicly concerning the discriminatory results of the Inflation Discount Act hindering the event of inexperienced applied sciences in different international locations.
As well as, the US and different international locations have realised that no nation is prone to develop self-sufficiency in renewables on the scale wanted. In need of international cooperation, the world is prone to see extra regional cooperation and “friend-shoring”, that’s, a strengthening of alliances and partnerships with like-minded international locations to pool sources and safe dependable and inexpensive low-carbon power provides.
This situation of a decoupling of provide chains – with China on one hand, and the US and its allies on the opposite – is probably not a foul end result in and of itself. It might improve power safety for different international locations by offering a number of sources of renewables and likewise if it raises the worldwide provide of those metals.
Nonetheless, in a world of bifurcated power provide chains, if environmental, social and governance (ESG) requirements fluctuate significantly, with lax environmental laws in some international locations, this might give rise to additional tensions and accusations of unfair practices.
Amid this ongoing international useful resource battle, there are numerous considerations as we gear up for a shift in dependency from fossil fuels to inexperienced metals and minerals. Thus, international locations ought to pursue their development methods in such a manner as to scale back their planetary footprint by taking power effectivity, circularity and recycling far more critically.
Ramkishen S. Rajan is Yong Pung How Professor on the Lee Kuan Yew Faculty of Public Coverage, Nationwide College of Singapore
Bhavya Gupta is a PhD candidate on the Lee Kuan Yew Faculty of Public Coverage, Nationwide College of Singapore, and a Fox Worldwide Fellow at Yale College