Impact of Paris Climate Agreement’s Sustainable Energy Agenda on the Mining Industry
In recent years, the countries that were rich in petroleum resources were seen as having some of the most financially secure economies. The growth of the petroleum and oil industry provided prospects for expansion in a wide variety of other industries, including mining, the power industry, and trade, etc. However, with the realization of climatic change through agreements such as the Paris Climate Agreement, the world has shifted its focus towards new and improved methods to create energy sources, that have less impact on our surroundings. The nations are now phasing out the use of fossil fuel and are adopting clean energy technologies such as Lithium-ion batteries, solar panels, turbines that can be operated from waves or through the wind
This shift in paradigm raises the question regarding the future of the mining industry in response to the agreement reached in Paris addressing climate change to attain zero carbon emission through the use of green and clean energies. The policy discusses both this risk and opportunities that may arise as the result of achieving targets of the Paris Climate Agreement
Situation Brief
In 2015, a large number of countries agreed anonymously to establish an ambitious goal of limiting the rise in global temperature to 1.5 degrees Celsius over pre-industrial levels. To accomplish this objective, the countries should make sure that their carbon emissions must begin to fall consistently and arrive at zero by roughly 2050. One of the leading factors that add a large carbon footprint is a fossil fuel. Hence the Paris Climate agreement calls for an urgent transition to phase out the use of fossil fuels adoption of clean energy technology is essential to achieving a future with reduced carbon emissions[1]. As the European Union, China, and the United States move in earnest to decarbonize their energy systems, it is becoming clear that the era of hydrocarbons is drawing to a close. Before the year 1850, natural gas and oil did not have a significant impact on human society.
It has been strongly recommended that traditional energy sources that are based on fossil fuels should be replaced with technologies renewable energy technologies to meet the objectives of the Paris Climate agreement. The new energy goals focus on creating an environment, where every living being can live in a healthy environment. On the other hand, a heated discussion on the trajectory of the mining industry has recently resurfaced[2]. In the opinion of a significant number of academics, the phasing out of fossil fuels and coal-based resources will have a detrimental effect on the mining industry. At the moment, the exploration, extraction, and transportation of petroleum-based goods make up a significant portion of the mining business.
The process of phasing out the use of fossil fuels is complicated and will take some time. The closure of mines will not only result in the displacement of mine workers but will also have a disproportionately negative impact on workers in adjacent industries as well as on their entire communities in mining districts[3]. This is especially the case in remote areas where the only form of economic activity is mining. The shutdown of the mines will have a significant impact on all aspects of economic activity in these areas. Many countries that produce fossil fuels and coal lack the resources necessary to protect workers and communities, rehabilitate lands that have been harmed, and capitalize on the economic opportunities that become available as a result of transitioning away from coal and fossil fuels[4].
In a similar vein, on the opposite end of the spectrum, a large number of prominent institutes have stepped up to assist in the creation of a smooth transition between the phasing out of coal and fossil fuel extraction sites and the adoption of renewable energy. The World Bank has years of expertise assisting nations through the process of transitioning away from reliance on coal mining and power plants, regardless of where these nations currently stand in the process. This includes taking a look at the interdependencies that exist between the decommissioning of coal assets, such as mining, transport, and power plants, and the development of programs to replace them with renewable energy sources. Since 1995, the World Bank has contributed more than $3 billion to help facilitate the transition away from coal[5].
On the other hand, the shift away from fossil fuels and toward green energy technologies has the potential to unlock previously inaccessible avenues for the expansion of the mining industry. The World Bank estimates that the production of minerals could increase by more than 450 percent by the year 2050 to meet the growing demand for clean energy technologies. The process of decarbonizing global energy systems will lead to an increase in demand for a variety of critical minerals, including aluminum, coltan, copper, lithium, tantalum, and cobalt. These minerals are essential to the operation of solar, wind, geothermal, and other forms of renewable energy, as well as electric vehicles. Hence this will give a boost to the economy of the countries that are rich in these minerals. Moreover the change in the paradigm of the potential have the capacity to change the world economic stage.
To achieve the goals set forth by the Paris Agreement regarding renewable energy and emissions reductions, the global production of a number of these minerals will need to increase by a large percentage. As the world is moving towards more green energy-based technologies, these minerals have become very important as they play a crucial role in the construction of solar panels, batteries, and other green technologies. For this purpose, it is estimated that a large number of jobs will be created in the mining industry. The expansion of mining industry will not be limited to particular functionality, but it will also help other related business sectors to grow as well. Examples are transportation sectors .
“Did You Know?”
The Mining Industry Produces 4-7% of Global Greenhouse Gas Emissions
While critical to the clean energy transition, the mining sector currently accounts for a significant portion of global emissions, raising questions about sustainable extraction practices.
Because environmentally friendly technologies make it possible for buildings and industries to function independently of power grids, hence we can anticipate that in near future, even rural areas that currently have limited access to power due to large distances or geographical conditions will be able to take advantage of electricity. In addition to this, the fact that green energy technologies have the potential to produce portable energy units will also make them an important requirement for the military and the medical community[6]. As a result of this, the demand for the mining industry has the opportunity to grow rapidly in both the economic and the strategic sphere.
Policy Option
New opportunities for growth in the mining industry have become available as a result of the massive efforts being made y countries to meet the targets established by the Paris Climate Agreement by the year 2050. However, another important issue that has been brought to light is the use and misuse of these minerals. The implementation of the Paris Climate Agreement is contingent on the availability of sufficient supplies of the mineral that are required for renewable technology. Nevertheless, it is of the utmost importance to determine how the increase in mineral extraction would impact the progress of the Paris Climate Agreement.
The mining and metals industry is already responsible for between 4 and 7 percent of the world’s greenhouse gas emissions (GHG) at present[7]. The increased mining of minerals, on the other hand, carries with it the risk of expanding the industry’s overall carbon footprint. For this reason, there is a need to create appropriate laws and regulations that can help determine the safe quantities of extract and the methods to use. Similarly an increase in the mineral extraction, would need more means of transportation and energy sources, which are at the moment are being derived from fossil fuel. Hence increasing the mining capacity can have a increased foot print due the excessive use of transportation and processing units
The image illustrates a comparison between global temperature rise and the targets set by the Paris Agreement from 2000 to 2050. The red dotted line represents the observed and projected global temperature rise, steadily increasing and exceeding 2.5°C by 2050. In contrast, the green line marks the Paris Agreement target of keeping the temperature rise below 1.5°C, highlighting the growing gap between actual global warming and the target goals.
Similarly, another important risk related to the future of the mining industry is related to the possibility that if mining of these minerals will fall victim to the resource curse. In previous practices, a large number of different industries were negatively impacted as a result of the excessive consumption of raw products and minerals. However, the response to this question may involve a lot of different factors. The resource curse is not something that can be determined solely by analyzing the quantity of the minerals that are being extracted; rather, it is something that depends on a variety of factors, including politics at the local level, the financial stability of the nation, as well as legal laws and policies. There are a large number of examples from the past where struggling nations have had to outsource their natural resources to more stable countries. The stable countries exploit such situations and take maximum advantage in terms of resources overuse while providing little chance for local industries to grow
An additional component of risk that is not immediately tied to the scope of the paper policy but is directly linked with the growth of the mining industry in the future. Mining activities can have a variety of direct and indirect effects on social and environmental systems. The activities involved in mining can harm the site area and its surroundings. These activities can result in the deforestation of the surrounding to make more areas for mines or to create space for workers or transportation. Along with this, other effects like erosion, and the addition of chemicals to soil and other water bodies can deteriorate the local environment
In addition to the mining activity, the infrastructure that is created to support mining activities such as roads, ports, and railway tracks can have an impact on the habitat and migration pathways of animals. However, the need of mining large quantities of such minerals can create a trade-off between the Sustainable Development Goals and the Paris Climate Agreement. The Paris climate agreement may, on the one hand, encourage the mining of a large number of mineral quantities to lower the cost of environmentally green technologies while on the other hand, this particular act may make it more difficult for the nation to achieve the Sustainable Development Goals (SDGs).
Similarly, another important impact that needs to be analyzed is how climate change will impact the mining industry, if the majority of the nation fails in achieving the objective Paris Climate Agreement. The mining industry is highly susceptible to the effects of climate change. Alterations in climatic conditions will have direct effects on mining operations and management and rising costs of energy. According to projections, climate hazards such as prolonged dry spells, strong heat, and intense precipitation will become more recurring and severe in the future, which will increase the number of logistical issues faced by mining operations.
The mining industry needs to be prepared for environmental threats that may happen as a result of the failure of lowering the carbon footprint to control the temperature. It is estimated that between 30 and 50 percent of the world’s production of copper, gold, iron, and zinc is currently being carried out in such countries, that are already experiencing high levels of water stress. It is anticipated that climate change will cause more frequent droughts and floods, which will alter the supply of water and cause mining operations to be disrupted. Even in regions with a low risk of water shortage, certain mining processes that require a lot of water could be put in jeopardy. As per a recent report In 2018, potash miners in Germany were forced to shut down two locations because of severe water shortages, resulting in a loss of approximately $1.9 million per day per location[8]. Similarly, change in water supply levels can harm a wide variety of mining operations and activities, including exploration, drilling, dust suppression, etc.
Recommendations
Mining plays a crucial role that helping us to extract materials that make modern life possible and help the economy grow responsibly. These industries are important as they can help to steer society to move toward a low-carbon future to achieve the Paris Climate agreement.
As of present China owns a little more than half of the world’s rare earth element reserves, which puts it in first place among the top three countries in terms of REE reserves alongside Russia, Vietnam, and China[9].
Issues relating to ownership and mining of these minerals should be drafted carefully while considering environmental effects, local domestic rules, and share of stakeholders For instance, the United States possesses deposits of certain of these minerals; yet, the federal government of the United States does not have direct authority over the production or mining of these minerals, unless it chooses to invoke legislation such as the Defense Production Act of 1950[10].
Additionally, it is the ideal time for countries that are abundant in minerals to formulate trade policies to protect both their economic and political interests. Similarly, the international organization should also work with these countries to make sure that such countries are not exploited in terms of their mineral resources. For instance, Afghanistan also possesses critical minerals required for green technology, however, the country is extremely susceptible to corruption, supported by foreign firms or countries
Even though there is now a greater knowledge of the mining industry’s positive and negative effects on climate change, countries still have not included significant climate provisions in the mining contracts. It has become crucial for businesses in the mining industry to acknowledge the reality of climate change and formulate regulations that may serve as a guideline to gain an understanding of how a temperature change will affect the mining industry.
At the moment, the burning of fossil fuels is the primary source of energy that is utilized in the mining industry as well as other businesses. Therefore, it is necessary to design plans that will minimize the impact of phasing out fossil fuels on infrastructure and operations. These strategies should be developed as soon as possible.
Bibliography
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