Critical raw materials for the energy transition

Renewable energy generation and storage requires specialized capital goods, embedding critical raw materials (CRM). The scarcity of CRM therefore affects the transition from a fossil based system to one on renewables, necessary cope with climate change. We consider issue in theoretical model, where we allow for very costly potential substitute, reflecting backstop technology, partial recycling goods. characterize main features efficient transition, their dependence relative abundance technology. Recycling reduces cost transition. It also calls having large stock recyclable embedded at time adoption Moreover, constraints policy tools myopic regulation, show how abstracting CRM, or tightly linking subsidies renewables carbon tax revenue, is misleading designing policy.