Understanding dynamic availability risk of critical materials: The role and evolution of market analysis and modeling
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REVIEW Understanding dynamic availability risk of critical materials: The role and evolution of market analysis and modeling
Elsa Olivetti, Materials Science & Engineering, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139, USA Frank Field, Engineering Systems Division, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139, USA Randolph Kirchain, Engineering Systems Division, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139, USA Address all correspondence to Randolph Kirchain at [email protected] (Received 27 October 2014; accepted 6 April 2015)
ABSTRACT Over the last decade, our understanding regarding the nature and drivers of criticality risk has matured significantly. We review modeling efforts to date, specific to evaluation of future material availability, and identify research gaps. Many advanced energy technologies are fundamentally “materials-dependent”; they are enabled directly by, or designed around, a particular material or materials. Society's acute dependence on materials has increased in recent years as these technologies tap into an ever broader range of the periodic table and, therefore, into a broader set of underdeveloped and complex supply chains. Ultimately, concern around the supply of materials strategic to energy and security interests has led to the development of a range of systems used to assess criticality—the confluence of vulnerability and risk. Concerning the assessment of criticality risk, this review accomplishes two primary goals. First, through a review of several broad assessments of criticality metrics, we identify those metrics that incorporate assessment of future production and consumption. We review the methods that have been applied to project production and consumption along two axes, one around degree of detail or granularity pursued by the model and the second around the degree to which market function is modeled endogenously. Regarding the second, material projection methods can be broadly classified as (a) those which project material flows only and (b) those which use market modeling to explicitly simulate (endogenously) the associated economic behavior and its implication on material flows. Keywords: sustainability, recycling, economic, energy generation
DISCUSSION POINTS • While the formal purpose of a market is to allocate scarce resources, the recurrence of resource “crises” suggests that, when it comes to anticipating problems, market signals, such as price, alone are imperfect indicators. • The, as of yet, unmet challenge to the materials community is to develop methods of assessment that treat complex dynamics while maintaining the accessibility necessary to provide useful guidance to planners seeking to mitigate criticality risks.
Introduction For as long as there has been a field of economics, there have been economists who have fretted over the scarcity of resources and its ramifications for society. Moreover, some
of the most famous assessments of the problem have come to rather dismal conclusions.1
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