Integrated management of abatement technology investment and resource extraction

Jianxin Guo, Xianchun Tan, Kaiwei Zhu and Yonglong Cheng

Resources Policy, 2024, vol. 92, issue C

Abstract: As the need for increased renewable energy generation to meet climate goals grows, so does the demand for critical minerals in the industrial sector. This raises concerns about the availability of supply and the reliability of investment in critical minerals. Based on this, the study proposes an analytical framework for the integrated management of mineral extraction and renewable energy investments. Different from the previous strategy of separate management, this study has established an integrated model that utilizes new energy technology as the downstream application of emission reduction technology. It also utilizes copper, zinc, aluminum, rare earth elements, and other materials as the upstream raw material supply. In terms of minimizing costs, the entire supply chain process is optimized to achieve an empirical case. In addition, considering the significant uncertainty in the process of reducing emissions from new energy technologies, this study also incorporated a forward control stochastic programming method to model and solve it. We obtained confidence intervals for optimal technological investment paths and metal mining paths under various scenarios. Our findings indicate that: (1) Biomass, as a renewable energy technology with the lowest resource demand, should be prioritized for development. However, there is significant uncertainty surrounding the installed capacity of photovoltaics. (2) Copper ore reserves have little impact on the development of renewable energy technologies, while zinc ore and aluminum ore have a greater impact on wind energy and photovoltaics, respectively. (3) By optimizing the cut-off ratio of raw ore under a specific amount of ore storage, we can ensure the availability of materials needed for downstream energy technology.

Keywords: Natural resource extraction; Renewable energy investment; Integrated production; Cutoff grade optimization (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:92:y:2024:i:c:s0301420724003416

DOI: 10.1016/j.resourpol.2024.104974

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