Exorbitant Privilege of the Periodic Table? Geoeconomics, Endogenous Centrality and Strategic Minerals for the Green Transition

Josh Kirk, Evgenia Passari and Rey, Hélène

No 21742, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Trade networks underpinning the energy transition are endogenous economic objects, and their structure is a source of market power. Using bilateral trade data for thirteen electrification metals over 1995–2023, we show that trade in these materials has reorganised into a hub-and-spoke system centred on China, in sharp contrast to the diffuse, multilateral structure of fossil fuels. This centrality did not follow from resource endowments: China holds few of the underlying reserves. It was built through processing investment, industrial policy, and commodity-targeted development finance—an equilibrium outcome rather than a geographical accident. We formalise this in a stylised model in which a country chooses how central to become, and show that centrality maps into pricing power: the world price response to a strategic supply cut is stronger when the network is more concentrated and downstream demand and fringe supply are more inelastic. Constructing text-based, commodity-specific supply shocks and estimating local projections, we find that supply contractions in critical metals raise US and EU consumer prices by roughly twice as much as comparable fossil-fuel shocks, and more persistently. Centrality is therefore not merely descriptive: it creates leverage over global prices. The green transition reduces strategic dependence on hydrocarbon exporters but reconstitutes it around mineral supply chains.

Keywords: Strategic; supply; cuts (search for similar items in EconPapers)
JEL-codes: F50 (search for similar items in EconPapers)
Date: 2026-07
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