Lukas Boer, Andrea Pescatori, Martin Stuermer, Nico Valckx, 05 November 2021

Low greenhouse gas technologies require more metals than their fossil fuel-based counterparts. This column estimates supply elasticities and pins down the price impact of the energy transition on the metals markets. The results show that prices for copper, nickel, cobalt, and lithium could reach historical peaks for an unprecedented, sustained period in a net zero emissions scenario. The total value of production could rise more than four-fold for the period 2021-2040, rivaling the total value of crude oil production.

Akshaya Jha, Frank Wolak, 14 August 2019

Futures trading should make spot markets more efficient. The column uses the introduction of purely financial traders in the California energy market to show that their presence reduced average price differences between day-ahead and real-time markets. The introduction of financial trading in high-demand hours saved $23 million in fuel costs and reduced emissions and pollution.

David Jacks, Martin Stuermer, 07 December 2018

There is a lack of consensus on the importance of various drivers of long-run commodity prices. This column analyses a new dataset of prices and production for 15 commodities, including metals, agricultural goods, and soft commodities, between 1870 and 2015. Demand shocks due to rapid industrialisation and urbanisation have driven a substantial amount of variation in commodity price booms. While demand shocks have gained importance over time, commodity supply shocks have become less relevant. 

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