Thread by @clemfon

@Isabel_Schnabel did another brillant speech on #greenflation, that is, how rising prices in commodities and rare earth metals are complicating the green transition. She touches on many points tackled by @cedric_durand & others but maybe neglects 2 crucial issues 🧶👇

What is Greenflation? It relates to the fast rising prices of the materials needed for the green transition. Take lithium, which is mainly used to build batteries (74% end use), the key component for switching to electric cars AND solar panels: its price rose by 1000% (no typo)

While Schnabel rightly underlines that inflation should be tolerated by central banks, which should support the fiscal efforts of governments to ramp up investments related to green economic systems, she is silent on 2 major problematic issues related to market driven transition

1. Schnabel says that opening new lithium mines take time (5-10years). These (too late) openings might not be enough to meet the whole demand both short and long term. And market driven dynamics still can't create lithium out of thin air.

So, we need Lithium for the transition of our energy systems NOW and there won't be enough (nor at a affordable price) in the short term for both electrifying our car addiction and shifting from gas and oil to solar panels (remember we need Lithium for both).

The combination of (individually owned) car electrification and the trend of purchasing larger SUVs needing larger batteries will suck a lot of lithium away from solar panels. And will make the prices of solar panels more expensive, threatening the affordability of green energy

I'm no expert on this topic and I might be wrong on the existence of a trade-off between electrifying SUVs and building solar panels but if it exists, this is where Schnabel speech falls short and why we need to add both @cedric_durand + @IsabellaMWeber & @DanielaGabor arguments

Recognising tradeoffs in the green use of lithium and other carboned products is the 1st missing point in Schnabel speech. The 2nd interrelated point is the shortcomings of driving transition with market prices rather than "hard" law and strategic planning

The social and environmental value of using lithium for solar panels rather than SUVs might be super high but the lithium price is the same for both and will always be. So what can we do against this? Ban SUVs, transform mobility and shift away from indiv-owned cars.

By doing so, we would preserve precious lithium, keep the prices of solar panel affordable and improve the social dimension of green transition: SUVs owners won't be privileged while low-income households will benefit from cheaper energy and lower pollution

In sum, market prices are blind to the social and envrionemental added value in the end-use of carboned products. Tax and laws can correct this but political courage to confront our car addiction (and the too easy solution of electric cars) is missing/end