The energy transition is essential to combat climate change, but it also brings with it significant challenges such as unintended effects in political, economic, social and environmental spheres.

Political Effects:

• Dependence on critical raw materials (CRMs): Demand for lithium, cobalt and rare earths has increased, generating geopolitical dependence and concentration of suppliers in countries such as China and the Democratic Republic of the Congo1.
• Rising prices and volatility: The increasing demand for CRMs can raise prices and generate instability in the market.

Economic and Social Effects:

• Increased energy prices: The transition can increase energy prices, affecting business profitability and household well-being.
• Impact on the oil, coal and gas industry: The decrease in demand for fossil fuels affects these industries, causing job losses and local economic decline.

Environmental Effects:

• Intensification of mining activity: Demand for MPC has intensified mining activity, generating pollution and affecting ecosystems.
• Biofuel production: It competes with food production, contributes to deforestation and can have a negative impact on climate change.

The energy transition presents significant challenges that must be properly managed to minimize its unintended effects. It is crucial to adopt effective measures, such as policy coordination, investment in infrastructure and the development of sustainable technologies, to achieve a fair and sustainable transition in the long term.

Are you interested in learning more about these unintended effects of the energy transition? To learn more, you can download the attached document.