This short piece describes my professional friendship over the years with Phillip Crowson and the reasons he is among the great mineral economists of our era.

No one as a child dreams of growing up and someday becoming a mineral economist.Yet, for some of us, as we finish our education and begin working, random but fortunate events conspire to guide us into this field.In my case the first such event occurred in graduate school.I was searching for a dissertation topic in field of international trade.Béla Balassa, my thesis advisor, was not particularly thrilled by what I thought were several brilliant suggestions.He proposed instead that I examine international trade patterns in non-ferrous metals.Why non-ferrous metals?Apparently, he had done a bit of research on this topic the previous summer while working at OECD Headquarters in Paris.Otherwise, he had no particularly interest in metals-non-ferrous or otherwise-but rather was intrigued by how former colonial bonds and corporate ownership ties distorted trade flows among countries.The topic allowed us to obtain

The global transition to a low-carbon economy will involve changes in material markets and supply chains on a hitherto unknown scale and scope. With these changes come numerous challenges and opportunities related to supply chain security and sustainability. To help support decision-making as well as future research, this study employs a problem-oriented perspective while reviewing academic publications, technical reports, legal documents, and published industry data to highlight the increasingly interconnected nature of material needs and geopolitical change. The paper considers a broad set of issues including technologies, material supplies, investment strategies, communal concerns, innovations, modeling considerations, and policy trends to help contextualize policy decisions and regulatory responses. Policy options are outlined for each topical section, as well as areas for further research. Together, these recommendations serve to help guide the complex, interdisciplinary approach to materials required for a low-carbon transition.

Geologists, economists, policy analysts, and others use two different mental models when assessing depletion and the future availability of mineral commodities.The first, the physical view, relies on estimates of the available exploitable stocks of resources and the speed with which society is likely to consume them.The second, the economic view, uses as its measure of availability differences and trends in real (inflation-adjusted) commodity prices.This paper examines these two approaches, highlighting the very different implications that they suggest for the nature of depletion, its future threat, and the most effective public policies for coping with this threat.After exploring the shortcomings of each, the paper concludes that the economic view is, for several reasons, the more useful and helpful for understanding mineral depletion and its threat.

A widespread and pessimistic view of the availability of mineral commodities calls for strong government initiatives to ensure adequate future supplies. This article provides a more market oriented and optimistic perspective, one that focuses on production costs and prices rather than physical availability. It sees short-run shortages continuing to plague commodity markets in the future as in the past. Though painful while they last, these shortages are temporary and do not pose a serious long-run threat to human welfare. Moreover, even without government intervention, they self-correct. The sharply higher prices that they evoke create strong incentives that foster supply and curb demand. Potentially more serious are long-run shortages due to mineral depletion. Such shortages are often thought to be inevitable, a conclusion that flows directly from the physical view of depletion. For various reasons, we reject this view of depletion in favor of an economic view. The latter recognizes that depletion may create long-run shortages, but stresses that this need not be the case if new technology can continue to offset the cost-increasing effects of depletion in the future as it has in the past. The economic view also suggests that a list of mineral commodities most threatened by depletion can best be compiled using cumulative availability curves rather than the more common practice of calculating commodity life expectancies based on estimates of available stocks.

A recent article in this journal by Calvo et al. (2017) uses the Hubbert peak model to identify mineral commodities most threatened by resource depletion. It finds the global production of gold and antimony has already peaked. For 12 other commodities, peak production is expected within the next 50 years, raising further concerns about depletion. Wellmer and Scholz (2017a) challenge the conclusion that gold production has reached a Hubbert peak. They argue that with higher prices production will again rise. Calvo et al. (2018) reply that gold resources are limited and increasingly difficult to exploit. This article-a third party review of this exchange-questions three critical assumptions of the Hubbert model-that resource availability shapes production trends, that ultimately recoverable resources can be reliably estimated, and that mineral commodity production follows a bell shape curve. It argues that commodity prices provide a better alternative to the Hubbert model and other methodologies using ultimately recoverable resources or other physical measures of scarcity. This means, to assess the availability of mineral commodities 50 or 500 years in the future, one needs some indication of the extent to which new technology will offset the cost increasing effects of depletion. Given the inherent difficulties of forecasting technological change, assessing reliably the future threat of resource depletion is often impossible. There are, though, exceptions: mineral commodities whose available resources can provide for continued production over many years with little increase in costs even without cost reducing technology change.

The major producers of most mineral commodities possess large market shares and so can raise the market price by restricting their output. For this reason, many assume that they possess market power. However, this article argues that there are two necessary conditions for market power: a market share sufficient to raise the market price is the first; the second is the incentive to do so. Firms that fulfill the first condition do not necessarily satisfy the second. This is because maximizing profits this year by restricting output and raising the market price usually has negative consequences for future profits. In particular, a price higher than the competitive price over time reduces market demand below what it otherwise would be by encouraging consumers to switch to substitute materials and to introduce material-saving new technologies. The higher price also encourages rival firms to increase their capacity and output. The result is a smaller market share and lower, even possibly negative, profits in the future. Failure to recognize the second necessary condition for market power provides a plausible explanation for the widespread perception that the major mineral producers—both firms and countries—possess substantial market power, even where hard evidence of such power is lacking.

Since developed countries have contributed most of the greenhouse gas emissions currently responsible for climate change, should they pay all or most of the costs for needed climate change policies? The original polluter pays principle contends that firms and in turn countries should be charged for the full costs to society of their current pollution. This policy promotes both efficiency and common perceptions of equity. The historic polluter pays principle—a modification of the original polluter pays principle used to argue that developed countries should pay most of the costs for climate policies—contends that the costs of remediating past pollution should be allocated according to their past pollution. For various reasons, however, the historic polluter pays principle does not promote efficiency nor even equity. So those who advocate that the developed countries shoulder the lion's share of climate policy costs need to use other arguments. Moreover, regardless of how the costs are allocated, the original producer pays principle should be implemented so that current producers pay the full costs to society of their greenhouse gas emissions wherever they are located. These findings are of interest to the mineral and energy sectors since global climate policies will substantially affect these sectors. Moreover, one can extend the findings to remediation policies for all past pollution, including for example the cleaning up of old historic mining sites.