44 research outputs found
A structural decomposition of global raw material consumption
Between 1995 and 2008, the global extraction of biomass, fossil fuels, and minerals
grew from 48 to 69 billion metric tons. This study investigates how changing consumption
and investment patterns a↵ected the aforementioned increase. A series of
Structural Decomposition Analyses at a global level as well as for 38 major economies
is conducted. The analyses disentangle the drivers of Raw Material Consumption,
which measures the extraction of materials necessary to produce a country’s final demand.
Data is taken from the World Input-Output Database. The results suggest
that rising final demand is the predominant driver of growing Raw Material Consumption.
Furthermore, final demand shifted into countries that consume material
intensive goods. This shift was particularly pronounced for construction minerals and
investment, indicating that infrastructure investment in industrialising nations was a
key driver. The mix of goods in final demand slightly dematerialised. Falling material
intensities in extractive industries as well as changes in production and trade patterns
decelerated the growth of Raw Material Consumption. The country-level Structural
Decomposition Analyses obtained qualitatively similar results
The metal resources (METRO) model : a dynamic partial equilibrium model for metal markets applied to rare earth elements
This paper presents the METal ResOurces (METRO) model, a partial equilibrium
model tailored for metal markets. It allows for a disaggregated representation of the
mining sector and endogenous investment in extractive capacities. It can be calibrated
to a large number of metal markets. Rare Earth Elements are the first group of metals
for which the model is implemented. A new dataset on Rare Earth mines is compiled
to calibrate it. First results on key developments of Rare Earth markets are presented.
Extensive sensitivity analyses indicate their robustness
Dynamic market power in an exhaustible resource industry : the case of rare earth elements
This paper investigates China's capability to exert power on Rare Earth markets until
2020. A dynamic partial equilibrium model allowing for a disaggregated representation
of the mining sector and endogenous investment in capacities is developed. The
model is calibrated on a novel dataset on Rare Earth mines. Simulations show that
Chinese market power is a transitory phenomenon. In 2014 and 2015, Light Rare
Earth prices increase by 21 per cent and Heavy Rare Earth prices more than double
compared to free trade, if assuming export restrictions to remain unchanged. Market
power on Light Rare Earths vanishes almost completely by 2017 due to the entry of
new suppliers, while it persists until 2019 for Heavy Rare Earths. Export restrictions
imply a loss of Marshallian welfare of US$ 1.96 billion outside China. In the short run,
even moderate cuts in export quotas can increase exerted market power substantially.
Altering tariffs induces smaller but more persistent effects. Sensitivity checks indicate
that the results are robust, but delayed opening of new mines and demand shocks can
be important for China's capability to exert market power
Industrial ecology in policy making : what is achievable and what is not?
A diverse set of tools has been developed in Industrial Ecology to tackle the problems caused by human economic activity. These instruments include Life Cycle Assessment (LCA) and Material Flow Analysis (MFA). Especially LCA is now increasingly used in policy making. Design and Evaluation of policy measures necessitates careful weighing of costs and benefits. One has to consider the complex economic effects imposed by regulation, like costs for the industries affected by regulation, indirect effects on other industries and ecologically important rebound effects. This article discusses to what extent this evaluation is possible within LCA and MFA models. It is found that these models do not sufficiently incorporate the overall consequences of regulation and hence are not very suitable to measure the advantages or disadvantages of regulations. Therefore, adding economic aspects to Industrial Ecology models seems promising. In policy making, the effects imposed on the whole economy have to be captured, which calls for a general equilibrium framework. A Life Cycle based Computable General Equilibrium Model is proposed as a tool to assess the economic effects of regulation while remaining in life cycle thinking
The optimal tariff in the presence of trade-induced productivity gains
We scrutinize the impact of international productivity gains (spillovers) induced by
imports and exports on optimal tariffs. First, we solve a stylized 2x2 trade model of
a large open economy and show that (a) productivity gains via exports and imports
both reduce the strategically optimal tariff, (b) there exists a certain strength of productivity
gains such that the incentive to manipulate the terms of trade strategically
vanishes, (c) the welfare gain that can be achieved via a tariff is lower in the presence
of productivity gains than in their absence, and (d) these results even hold without
power on international markets. Second, we apply this model to a panel data set
covering 40 countries, 29 sectors and the years 1995 to 2009. We find that importdriven
productivity gains are stronger than export-driven productivity gains. Third,
we extend our 2x2 model to a multi-region, multi-sector model that we calibrate to
the data set used in the econometric analysis and to the econometrically estimated
productivity gains. Optimal tariffs are reduced by 17% for the US and China and
40% for Brazil when taking trade-induced productivity gains into account. The USA
are the only model region that gains from European optimal tariff policy. Thus,
trade-induced productivity gains have empirically relevant effects on optimal tariffs
A political economy of Chinas export restrictions on rare earth elements
We investigate why governments restrict exports of exotic raw materials taking
rare earth elements as a case study. Trade restrictions on exotic materials do not
have immediate macroeconomic effects. Relocating rare earth intensive industries is
found to be the main reason behind China's export barriers. They are part of a more
extensive strategy aiming at creating comparative advantages in these sectors and at
overcoming path dependencies. Moreover, export barriers serve as a second-best instrument
to reduce pollution and to slow down the depletion of exhaustible resources.
Growing domestic rare earth consumption renders those increasingly ineffective. Rising
reliance on mine-site regulation indicates that this fact is taken into account. Rare
earth extraction is dominated by a few large companies; the demand side is dispersed.
That speaks against successful lobbying for export restrictions. It appears as if the
export barriers are set up to compensate mining firms
The basic WIOD CGE model : a computable general equilibrium model based on the World Input-Output Database
This report presents the Basic WIOD CGE model. The model represents the first implementation of the World Input-Output Database (WIOD) into the CGE framework and is tailored to provide a maximum fit with WIOD data. The model is specifically designed such that it can serve as the basis for research in fields like environmental, climate and trade policy. It incorporates key features of WIOD such as bilateral and bisectoral trade ows, satellite accounts for energy consumption, greenhouse gas as well as other emissions to air on a sectoral level. As all WIOD data is available in the form of a consistent time series ranging from 1995 to 2009, the model can be calibrated to any year within this time period. The model relies on substitution elasticities which are consistently estimated from the same dataset the model itself is calibrated to. Moreover, the data preparation facilities and model are designed deliberately as exible as possible in order to allow researchers to use them as a basis for various applications. This enables researchers to secure the numerous advantages of the WIOD dataset when using CGE models for future research
Can smart policies solve the sand mining problem?
While sand has become a scarce essential resource for construction and land reclamation worldwide, its extraction causes severe ecological damage and high social costs. To derive policy solutions to this paramount global challenge with broad applicability, this model-based analysis exemplarily studies sand trade from Southeast Asia to Singapore. Accordingly, a coordinated transboundary sand output tax reduces sand mining to a large extent, while the economic costs are small for the sand importer and slightly positive for the exporters. As a novel policy implementation approach, a “Sand Extraction Allowances Trading Scheme” is proposed, which helps sustainably balance the importer’s economic growth with the exporters’ economic development. Copyright: © 2021 Hübler, Pothen. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited