Copyright Page
© 2021 International Monetary Fund
WP/21/243
IMF Working Paper
Research Department
Energy Transition Metals* Prepared by Lukas Boer, Andrea Pescatori, and Martin Stuermer
Authorized for distribution by Petya Koeva Brooks
October 2021
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Abstract
The energy transition requires substantial amounts of metals such as copper, nickel, cobalt and lithium. Are these metals a key bottleneck? We identify metal-specific demand shocks, estimate supply elasticities and pin down the price impact of the energy transition in a structural scenario analysis. Metal prices would reach historical peaks for an unprecedented, sustained period in a net-zero emissions scenario. The total value of metals production would rise more than four-fold for the period 2021 to 2040, rivaling the total value of crude oil production. Metals are a potentially important input into integrated assessments models of climate change.
JEL Classification Numbers: C32, C53, Q3, Q4, Q54.
Keywords: Conditional forecasts, structural vector autoregressions, structual scenario analysis, energy transition, metals, fossil fuels, prices, climate change.
Author’s E-Mail Address: lboer@diw.de, apescatori@imf.org, mstuermer@imf.org