Energy Transition Metals

The energy transition requires substantial amounts of metals, including copper, nickel, cobalt, and lithium. Are these metals a key bottleneck? We identify metal-specific demand shocks with an ``anchor'' variable, estimate supply elasticities, and pin down the price impact of the energy transition in a structural scenario analysis. Metal prices would reach historical peaks for an unprecedented, sustained period in a net-zero emissions scenario. The total production value of these four metals alone would rise more than four-fold to USD 13 trillion for the period 2021 to 2040, rivaling the estimated total value of crude oil production. These metals could potentially become as important to the global economy as crude oil.