Material security and climate change

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Material security and climate change

• Screen Version of Presentation to 2nd UK - Japan
  workshop on materials security
• University of Southampton 12 July 2007
• Henry Leveson-Gower
• Economics Policy Manager
• With research by Alex Peal, University of Bristol

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Outline
Climate Change ? Material Security Causality?
Mineral production CC vulnerability
Implications?
3
Outline
Climate Change ? Material Security Causality?
Mineral production CC vulnerability
Implications?
4
The Basic Climate Change Impacts Narrative from
IPPC
Natural disasters (flooding, typhoons etc) ?
Sea-level ? due to ice melting and breaking up
Water availability ? as precipitation patterns
change
Carbon emissions ?
Carbon stocks ?
Food (both due to less water changes in
temperature) ?
Health ? as diseases spread
Per Stern, leading to a 5-20 reduction in
Consumption per head
Biodiversity ? as the climate changes too fast
for adaptation
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So how might CC direct impacts affect material
security?
Disasters ?
Sea-level ?
Water avail ?
Food ?
Complex relationship, potentially triggered by
disasters, and is likely generally to be
within country rather than international
Health ?
Biodiversity ?
6
Environmentally induced migration is already a
well-established phenomenon
Asia 1976 - 1994
Source Clark (2007), Environmentally induced
migration and conflict. From Hugo (1996) and
UNDRO news 1976 - 1994
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So how might CC direct impacts affect material
security?
Disasters ?
Migration ?
Sea-level ?
Water avail ?
Food ?
Conflict ?
Health ?
Biodiversity ?
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So how might CC direct impacts affect material
security?
Clearly the causality here is even more complex
depending on the socio-political nature of the
state. Migration can also spur cooperation.
Darfur may not have happened without the
Sudanese existing conflictual situation even if
environmental factors made it worse
Disasters may no longer be seen as natural,
but the fault of the west, with political
implications
Disasters ?
Migration ?
Sea-level ?
Water avail ?
Food ?
Conflict ?
Health ?
Lack of water food will directly reduce export
potential, while conflict will more generally
impact on trade investment
Biodiversity ?
Disruption of resource production will vary oil
infrastructure tends to be seriously affected by
conflict (eg Iraq), while diamond mining can
continue in a war zone.
access to adequate supplies at a non-excessive
price to achieve reasonable QoL?
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So how might CC direct impacts affect material
security?
Disasters ?
Migration ?
Sea-level ?
"It seems to me rather like pouring petrol onto
a burning fire," Jock Stirrup, Uk chief of the
defence staff Chatham House Conf Reuters 25 June
2007
Water avail ?
Food ?
Conflict ?
Health ?
Biodiversity ?
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Outline
Climate Change ? Material Security Causality?
Mineral production CC vulnerability
Implications?
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So a more detailed look at potential impacts of
CC on mineral production.
Disasters ?

• Actual impacts on material security are complex
• and will also depend on
• whether mineral reserves are located in areas
• vulnerable to climate change
• how easy substitution can occur from affected
  minerals
• how elastic the demand is for the final products
• requiring this mineral

Migration ?
Sea-level ?
Water avail ?
Food ?
Conflict ?
Health ?
Biodiversity ?
This presentation looks mainly at the location
of mineral production (as a proxy for reserves)
in relation to areas vulnerable to climate
change
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Areas affected by significant climate change and
vulnerable to the impacts
Source German Advisory Council on Global Change
(WBGU) (2007), Climate change as a security risk
Migration ?
Disasters ?
Water ?
Food ?
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Of top 50 minerals by value in 2005.. Minerals
with gt60 production in one vulnerable area and
hence any supply disruption is likely to
seriously affect global supply
Source British Geological Survey (2007), World
Mineral Production 2001 - 2005
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Of top 50 minerals by value in 2005.. Minerals
with gt40 production in one vulnerable area and
hence any supply disruption is likely to
significantly affect global supply
1
1
6
2
x
Materials gt 60 in this area
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28 minerals out of top 50 insecure?
5.5
1
1
1
The most important area is China, suggesting that
international political issues may have a
substantial impact on material security
1
6
2
4.5
x
Materials gt 40 in this area
6 others have gt 60of their production in
vulnerable areas and so could be considered
potentially subject to climate change impacts.
x
Materials gt 60 in this area
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Initial consideration of mineral uses - demand
elasticity is generally not obvious, but..
Mineral
Use
Antimony
Flame proofing, lead hardener, paints, ceramics,
enamels
Beryl
Alloy hardener, x-ray machines, microwaves,
nuclear reactors
Iodine
Pharmaceuticals, medicine, dyes, catalysts,
halogen lights
Germanium
Fibre optic communication networks (85 of end
use in 2000)
Graphite
Pencils, golf-clubs, bicycle frames, paints
Magnesium
Refractory lining, aluminium alloys
Mercury
Research dental amalgam
Strontium
Alloys, cathode ray tubes
Niobium
Alloys in steel and super alloys
Tungsten
Electrical applications, light-bulbs and
super-alloys
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Key metal prices have had an upwards trend since
2004 suggesting increasing demand driven by
growth in China, India etc.
Recent prices for metals identified as
vulnerable to climate supply impacts were not
available in the public domain. However they are
likely to have had the same demand driven trends.
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With continuing growth in China, India etc,
demand is likely to continue with reserves of
many metals being exhausted.

• Global economic modelling of mineral use to 2050
  done by Kohmei Halada of the National Institute
  of Materials Science, Japan, suggests that by
  2050
• Iron, Molybdenum, Tungsten, Cobalt, Platinum,
  Palladium will be close to exhausting current
  economically feasible reserves
• Nickel, Manganese, Lithium, Indium, Gallium will
  be several times their current economically
  feasible reserves
• Copper, Lead, Zinc, Gold, Silver, Tin will have
  run over the amount of their reserve base
• the reserve base is current economically feasible
  reserves plus those currently not economic to
  extract.
• This modelling is based on analysis of historical
  patterns of metal consumption, including
  decoupling of GDP from metal use overtime, in
  developed countries and applied to the newly
  developing countries, particularly China and
  India.
• Of the 16 above minerals with threatened
  reserves, 8 are amongst those 28 identified as
  being potentially insecure due to climate change.
  Hence a further 8 minerals are potentially
  insecure due to limited reserves.

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Outline
Climate Change ? Material Security Causality?
Mineral production CC vulnerability
Implications?
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UK mineral balance of trade shows our import
dependence
High value as gold is expensive!
Source British Geological Survey (2006), United
Kingdom Minerals Yearbook 2005
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However we could mine our wasteeg mobile
phones
of World Mine Production
Global Sales, 2006 estimates 1bn phones x 70
g/handset x 3500 ppm Silver ? 250 t x 340 ppm
Gold ? 24 t x 130 ppm Palladium ? 9 t x 13
Copper ? 9,000 t 1bn phones x 20 g/Li-Ion
battery x 19 Cobalt ? 3,800 t
? 1
Only 4 recycled in the UK!
? 1
? 4
ltlt1
? 10
Source Christian Haglüken, Umicore, 17-10-2006
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So what conclusions can we draw?

• The supply of 28 out of 50 major minerals could
  be affected by Climate Change, however
• as China is the most important supplier of such
  minerals, supplying almost 50 of the affected
  minerals, international political relationships
  between China and consuming nations are likely to
  be a much more important factor.
• Work by the Japanese National Institute of
  Minerals suggests that reserves for 16 minerals
  (8 of which are not included in the 28 above) may
  also be inadequate by 2050 due to increasing
  demand from growth in India and China, without
  any climate change impacts.
• There is a need for greater understanding of
  mineral reserves, substitution and final demand
  to establish the risks and impacts of any supply
  disruption due to climate change.
• This analysis provides another reason to improve
  the recycling and recovery of metals from UK
  waste as a means of reducing material supply
  insecurity.