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

Predicting the structure of sparse orthogonal factors

AbstractThe problem of correctly predicting the structures of the orthogonal factors Q and R from the structure of a matrix A with full column rank is considered. Recently Hare, Johnson, Olesky, and van den Driessche have described a method to predict these structures, and they have shown that corresponding to any specified nonzero element in the predicted structures of Q or R, there exists a matrix with the given structure whose factor has a nonzero in that position. In this paper this method is shown to satisfy a stronger property: there exist matrices with the structure of A whose factors have exactly the predicted structures. These results use matching theory, the Dulmage-Mendelsohn decomposition of bipartite graphs, and techniques from algebra. The proof technique shows that if values are assigned randomly to the nonzeros in A, then with high probability the elements predicted to be nonzero in the factors have nonzero values. It is shown that this stronger requirement cannot be satisfied for orthogonal factorization with column pivoting. In addition, efficient algorithms for computing the structures of the factors are designed, and the relationship between the structure of Q and the Householder array is described