The mining industry as a net beneficiary of a global tax on carbon emissions

Abstract

AbstractThe technology used in renewable energy production is resulting in a material increase in the demand for many minerals and metals. While the mining industry contributes to global carbon dioxide emissions, the industry is also critical to lowering global carbon emissions across the broader economy. Here we test the impact of a hypothetical international carbon taxation regime on a subsection of the mining industry compared to other sectors. A financial model was developed to calculate the cost of carbon taxes for 23 commodities across three industries. The findings show that, given any level of taxation tested, most mining industry commodities would not add more than 30% of their present product value. Comparatively, commodities such as coal could be taxed at more than 150% of their current product value under more intense carbon pricing initiatives, thereby accelerating the transition to renewable energy sources and the consequent demand benefits for mined metals.