Accounting for Structural Change in Climate Policy Research: Lessons From Global Commodities Markets

Abstract

Positioning them as risk management tools, policy scholars and pundits often suggest that well-crafted climate legislation can help societies manage and mitigate the environmental costs and harms associated with burning oil, coal, and natural gas, as well as the risks associated with (over)reliance on capricious and sometimes hostile foreign suppliers. Central to this risk management proposition are alternative energy sources, such as solar, wind, and hydropower, and the “green” technologies that allow us to produce, distribute, and consume them. Yet, much like the oil, gas, and coal driven technologies they are intended to replace, green technologies also have materials requirements and obtaining the necessary raw materials also involves environmental and geopolitical risks. While policy scholars rightly consider the costs and insecurities associated with dependence on “fossil fuels”, including rising greenhouse gas emissions levels, climate change, and energy insecurity, less attention is typically paid to the other primary commodities and global marketplaces upon which climate policy impact depends. Thinking about the impact of climate policy interventions on distributions of environmental and geopolitical risk requires simultaneous consideration of many different markets at once, not only oil, gas, and coal, but also tungsten, aluminum, lithium, copper, and scores of other metals and minerals used to fabricate green technologies.