A1889
Title: European mineral trade and technology-driven energy transition: Stringent policy vs. geopolitical risks
Authors: Monirul Islam - Ural Federal University (Russia)
Dmitri Blueschke - University of Klagenfurt (Austria) [presenting]
Oleg Mariev - University of Klagenfurt (Austria)
Viktoria Blueschke-Nikolaeva - University of Klagenfurt (Austria)
Abstract: The aim is to investigate the relationship between European imports of aluminum and copper and clean energy technology-driven energy transition, while considering the roles of mineral prices, environmental policy stringency, inflationary pressures, and geopolitical risks from 2000 to 2023. Applying the method of moments quantile regression, the results reveal distinct responses: aluminum imports consistently rise with solar technology-driven energy generation across all market conditions, whereas copper imports respond positively to wind technology-based energy production in bear markets but negatively in bull markets. Environmental policies show a negative impact on aluminum imports but a mixed effect on copper, with negative responses in bear markets and positive responses in extreme bull markets. Geopolitical risks have no significant influence on imports of either mineral, while inflationary risks lead to increased demand for both. Notably, environmental policy stringency fails to mitigate inflationary or geopolitical risks in the aluminum import model but succeeds in the copper import model. To ensure robust findings, the Driscoll-Kraay standard errors and high-dimensional fixed effects methods are implemented to address cross-sectional dependency and endogeneity issues, respectively. These findings highlight the need for proactive, adaptive policies to secure mineral supply chains and safeguard Europe's technology-driven clean energy transition.
