Speaking in a keynote speech at the US Chamber's inaugural global forum on economic recovery, the Secretary to the Treasury said that in recent years the federal government had largely ignored the problem of climate change while ceding economic leadership to other countries.
“We know that climate change poses an existential threat, but we also know it presents a historic, economic opportunity for those companies, industries and countries [that] seize the mantle of leadership and drive the transition to a global, low-carbon economy,” she said on Tuesday May 18.
“For example, solar and wind are already the fastest-growing segments of the global energy market, but China has taken the lead in both and is racing ahead in developing battery storage technologies as well. Our disadvantage deepened over the past four years with our exit from the Paris Agreement, the removal of dozens of important environmental protections and our under-investment in technologies of the future,” she told the forum.
“We’re now less prepared than we ought to be for the increasingly frequent and deadly impact of weather-related events, and less equipped to lead the [transformation of the] global economy [that is already] under way. This administration is acting, and will make up for lost time,” she added.
A new International Energy Agency report, released earlier in the day on May 18, said that to achieve 2030 net-zero climate targets, the world needs to install the equivalent of its current largest solar park every day. It also said that renewables will need to make up 88% of the global power mix to neutralize carbon emissions.
Yellen’s comments come as the US debates a proposed American Jobs Plan, which aims to invest about one percentage point of the country’s gross domestic product (GDP) per year over eight years to upgrade the nation’s infrastructure, revitalize manufacturing, invest in research & science and shore up supply chains.
“The American Jobs Plan responds to the climate change challenge by investing in new-energy infrastructure and [by] supporting research & development that will incentivize innovation in renewable energy technologies,” Yellen said.
Many of the materials critical to the technologies that go into wind turbines, solar panels, electric vehicles, and energy-efficient lighting face supply challenges, however.
Solar energy requires various key raw materials, including indium, selenium, tellurium, and gallium for cells, as well as copper for wiring and thin film cells. Wind turbines, meanwhile, require aluminium, particularly in the nacelle housing the machinery that transfers wind power into electricity. And the magnets used in wind turbines require rare earths, which allow for smaller, lighter generators.
Batteries in electric vehicles as well as for use in energy storage meanwhile require raw materials such as lithium, cobalt, nickel, graphite and manganese.
According to Yellen, bridging the gap to achieve an energy transition will require embracing innovation abroad as well as at home.
“Let others innovate in advance. Let us seek to innovate faster and further. We ultimately benefit from the positive spillovers of innovation, wherever it occurs,” she said.
“In the hit musical [Hamilton], as Alexander Hamilton approached death, he ponders the question, what is the legacy? The answer is, it’s planting seeds in a garden you never get to see. Well, let’s build back better together and build something that will last for generations,” she added.
Domestic prices of nickel sulfate and cobalt sulfate, two of the key raw materials for lithium-ion battery cathode compounds, diverged last week - the stronger LME nickel price boosted the nickel sulfate prices, but sentiment in the cobalt sulfate market was poor.
Fastmarkets' price assessment for nickel sulfate min 21%, max 22.5%, cobalt 10ppm max, exw China
was 33,000-33,500 yuan ($5,132-5,209) per tonne on May 14, up by 500-1,000 yuan per tonne (2.3%) from 32,000-33,000 yuan per tonne on May 7.
Fastmarkets’ price assessment for cobalt sulfate 20.5% Co basis, exw China
, meanwhile, was 68,000-70,000 yuan per tonne on May 14, unchanged from a week earlier.