Florian Fizaine presented his paper “The redistributive effects of the energy transition between electric and metal sectors” at the 64th annual meeting of the French economic association (AFSE) held in Rennes, France, on June 22-24, 2015.
Abstract : The rare earth elements crisis has underlined a major geopolitical issue but also highlights the crucial dependency of metals to green energies. In parallel to this event, many international reports and academic studies have brought the evidence of a highest metal intensity of green energies in comparison to traditional energies. This paper explores the consequences stemming from the reinforcement of the link between energy sector and metal sector as a result of the energy transition. In a first time, we show with models of simulation calibrated on real data that energy transition could redistribute emission of CO2 between electric sector and metal sector but also create a new global geography of CO2 emission. In a second time, we discuss the potential effects of energy transition on the sharing of energy rents and offer to identify winners and losers resulting from this new distribution. Finally, in a third time, this paper emphasizes that the reinforcement of the interdependency between energy and metals includes fairly substantial risks, not only because it increase the sensitiveness of the energy price to the price of metals, but also because it makes the system more vulnerable and volatile in face of exogenous price shocks.