How do strategic mineral resources affect clean energy transition? Cross-sectional autoregressive distributed lag (CS-ARDL) approach

Abstract

In the transition to a low carbon economy, minerals are crucial. The demand for the minerals required to create and install green energy technology, such as solar panels, wind turbines, electric vehicles, and energy storage, is rising along with it. In particular, the countries that hold these mineral reserves should be thought of as thriving economically from the rising demand for essential mineral resources (such as cobalt, lithium, and others). This study uses import demand function analysis to look at how the major mineral importing countries’ mineral import demand changed in response to the clean energy transitions between 2000 and 2021 for selected 14 countries. In the study, the cross-sectional autoregressive distributed lag (CS-ARDL) method was used. Findings show that long-term renewable energy production has a largely favorable impact on mineral import demand. Additionally, CO2 emissions have a long-term negative impact on mineral import demands, but energy intensity and exchange rate are favorable for mineral imports. The findings have significant ramifications for using the mineral trade to speed up the transition to sustainable energy around the world. Therefore, the study’s key proposed policy is to emphasize the value of mineral resources in clean energy while maximizing their use in the transition to carbon-free energy.