ECON371/UBCO2024WT1/NewsWiki/group2/Wiki 5
Wiki 5
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Problem:
The article emphasizes the difficulties in switching to renewable energy sources because of the significant reliance on non-renewable resources for the production of essential minerals like copper and lithium. Although these minerals are essential for renewable infrastructure, their extraction is expensive and has an adverse effect on the environment. The shift is further complicated by switching expenses, such as the Energy Return on Investment (EROI). More often than not, renewable technologies are more energy intensive to deploy and sustain than conventional energy sources, further driving the inefficiency of the shift and making it more expensive and resource-full than anticipated.
Summary:
The article by the World Nuclear Association discusses our increasing demand for energy globally and its effect on rare minerals that are needed to generate electricity. Notably, the article claims that the demand for these rare minerals will septuple. Several of our current power generating methods require several of these minerals due to increasing EROI’s of our current power generation methods. Nuclear power does not require as many of these critical minerals to produce energy.
It is not without its caveats. Nuclear waste is significantly harder to reuse than waste produced by other power generation methods such as wind and solar. The minerals needed for nuclear power are copper, nickel, and chromium. Copper and nickel are vital for several other energy generation methods so a decision must be made for how we should use the resources for if it is worth the switch. Extraction of these resources after they are put to use for nuclear power will be more challenging than if they are used for other methods.
The switch to nuclear energy will require significant usage of water and land. As large amounts of water are needed for cooling purposes and land destruction from harvesting minerals recycling used minerals will be much more difficult. This also means there will be hazardous waste. We must be very careful with our decisions as several of the rarer minerals are not easily renewable even when used for green energy.
Prof: Your caveats are appropriate, but are not really part of the summary. I would put these things in a separate section or part of the conclusion. The summary should have gone into a bit more detail on the issues that the article raised.
Economic Concepts:
Non-renewable Resources
These are resources that are in finite, limited amounts. Their replenishment rate is much longer than the average human will experience. In nearly millions of years, more fossil fuels like oil or coal will be produced, so these resources are really very slowly renewing resources. These are resources without a natural growth function, so this means that even if we were to leave some stock and not cause exhaustion, the amount will not increase significantly enough to justify its increased consumption.
Switching costs
The switching cost is a concept used to better understand the costs related to switching to an alternative product when presented with the option to do so. Even when presented with an ultimately “better” alternative, when making the decision whether to switch or not the switching cost must also be considered, as the cost or effort given to switch may not make economic sense in a given measure. The cost beared onto the decision maker may take effect in the present or future, and therefore the decision may be influenced by the discount rate presented. For example, if gas prices are seen to be increasing, one may be faced with the decision of switching to an electric vehicle. When making this decision, the switching cost would be made up of factors such as the cost of the new vehicle, the predicted cost of maintaining the vehicle (assuming there are some differences), the predicted cost of recharging, etc.
Application:
Non-renewable resources
The article talks about how even though we do classify renewable and non-renewable resources, the boundaries defining both types are not very rigid. Even renewable resources are not really an option, because we have more “finite”critical resources used in alternative energy generation, but their regeneration rate is much slower than consumption. With the example of Electric Vehicles (EV’s) the article talks about how despite them being “greener” they are more mineral intensive and require more than fossil fuel technology. Recycling could help mitigate the demand for new mineral extraction, however less than 1% of critical minerals are actually recycled. Minerals such as lithium, nickel, cobalt, manganese, graphite, copper, and Rare Earth Elements (REEs) are essential for technologies like batteries, wind turbines, and EV motors. The demand for these minerals is expected to increase, however without proportionate increase in supply.
Switching costs
The article highlights that the responsible consumption of resources is vital to managing the switching costs associated with transitioning to greener energy sources. This transition will require not only critical resources like lithium, copper, and nickel, which are necessary for technologies such as batteries, wind turbines, and EV motors, but also more abundant yet still costly resources for building new infrastructure to connect these green technologies to the current power grid. The cost of switching is multifaceted, involving economic, ecological, geopolitical, and social dimensions. For example, constructing renewable energy infrastructure demands extensive land and water resources, which can lead to environmental degradation, while geopolitical tensions may arise over the limited supply of critical minerals. Effective policies that prioritize resource conservation, recycling, and international collaboration are essential in managing these various switching costs, ensuring that the transition to renewable energy is both economically viable and ecologically sustainable.
Conclusion:
In conclusion, the transition to renewable energy is crucial, but it’s fraught with challenges, especially the dependence on non-renewable resources like copper and lithium. These resources are finite, making their extraction costly and environmentally damaging. Additionally, the switching costs involved, such as the high Energy Return on Investment (EROI) for renewables, mean that more energy and resources are required to deploy and sustain them. To address these challenges, policies must focus on responsible resource use, recycling, and global cooperation to ensure a just and sustainable transition.
Prof: This article blends nicely with the discussion we had around 'Biophysical Economics', which emphasised the important role of EROI. As noted in the article, many of the minerals used in renewable energy products are used at low concentrations, and as such at the end of life, the concentrations of these materials is lower than in the virgin materials that are mined. As such, the amount of energy required for recycling is likely larger than for the virgin source mining. This is a serious problem for the long term sustainability of a lifestyle that involves using as much energy as we currently use.