Accounting for Unintended Ecological Effects of Our Electric Future : Optimizing Lithium Mining and Biodiversity Preservation in the Chilean High-Andean Wetlands

A low-carbon energy transition to fight climate change has intensified mineral and metal extraction and caused unintended ecological damage. Ecological conservation is challenged by the overlap between mining deposit areas and ecosystems, as in the case of lithium resources in the High-Andean wetlands of Chile. We show how accounting for the non-use values of biodiversity of these wetland ecosystems can change optimal mining patterns and enhance environmental conservation. We apply a meta-analytic benefit transfer function to estimate the non-use value of affected biodiversity and ecosystems. Then, we include these values in a competitive land use model that considers ecosystem services as assets and the opportunity costs of mining. Results show that accounting for wetland non-use values slows lithium extraction, varying with the value of the affected wetland ecosystem, how this affects resource rents and the size of the wetlands at the outset. Based on these findings, policymakers can design a mineral extraction tax that minimizes wetland damages and maximizes the benefits of a mineral boom while promoting a sustainable energy transition