Critical Mineral Depletion and Recycling: From the Perspective of the Cooperation and Open-Loop Competition

Weihua Ruan () and Benteng Zou
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Weihua Ruan: Purdue University Northwest, USA

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: Critical minerals are essential to the success of the transition to clean and sustainable technology. However, critical minerals face supply chain disruption, resource depletion, a lack of recycling technology and minimum demand, which may be increasing over time, at least in the short run. This paper models critical mineral extraction and recycling strategies under international cooperation and open-loop commitment competition. We show that (1) recycling technology can only partially reduce dependence on the virgin supply of critical minerals, given that recycling essentially relies on the accumulated supply from depletable resources; (2) the social planner's Markovian optimal market supply is based on either virgin or recyclable resources, with the more socially desirable being used first; (3) if the recyclable resource is exhausted, the social planner does not have an optimal choice regarding how to exploit the remaining virgin resource; but (4) under open-loop commitment, the two resources can coexist until the virgin resource is exhausted

Keywords: critical mineral; recycling; import and export; differential game. (search for similar items in EconPapers)
JEL-codes: C61 D4 L12 L72 Q34 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:23-03

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