Template-type: ReDif-Paper 1.0
Author-Name: Bartekova E. 
Author-workplace-name: UNU-MERIT
Title: An introduction to the economics of rare earths
Abstract: The aim of this paper 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 Chinas 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 offshore 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  nonviable.
Keywords: Production, Pricing, and Market Structure; Size Distribution of Firms; Mining, Extraction, and Refining: Other Nonrenewable Resources; Innovation and Invention: Processes and Incentives; Nonrenewable Resources and Conservation: Demand and Supply; Nonrenewable Resources and Conservation: Issues in International Trade; Alternative Energy Sources; Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling; 
Classification-JEL: L11; L72; O31; Q31; Q37; Q42; Q53; .
Series:  Working Papers
Creation-Date: 2014
Number: 043
File-URL: http://pub.maastrichtuniversity.nl/f9f3e4d5-e094-4266-9c46-4763fd25b427
File-Format: application/pdf
File-Size: 1093181
Handle: RePEc:unm:unumer:2014043