Peak resources cause conflict escalation.

But things could be worse. In its ‘resource competition’ future, distrust encourages a push for self-sufficiency in high-income countries. States intervene to secure supplies of critical minerals, which leads to shortages, price wars and disruption to supply. Annual demand for graphite, lithium and cobalt is expected to hit 450% of 2018 production levels by 2050, it noted.

Critical metals are essential for renewable energy and other industries, including technological and military end-users. For instance, indium is needed for touchscreens and solar panels, lithium for pharmaceuticals and cobalt for aerospace applications, as well as green hydrogen production. The EU, for one, is increasingly concerned about sourcing such metals.

There are few options for diversification, according to the report, with the US reliant on imports for 14 critical minerals, including gallium, graphite, indium and vanadium. China accounts for 98%, 82%, 58% and 66%, respectively, of their total production, and is the leading producer of half of 32 strategic minerals.

Demand for resilience fuels stockpiling of resources, which exacerbates supply problems, under this scenario. Other countries could follow Canada’s lead and restrict investments based on national security. Canada recently instructed three Chinese groups to divest their stakes in Canadian mineral companies after a review concluded that their investments in lithium mines posed a threat to national security.

There is also the likelihood of new trading blocs arising, interfering with existing alliances between mineral-rich and -poor countries, ‘while the potential for accidental or intentional conflict escalates’. The importance of alliances will increase too. ‘With a trend towards militarisation, these strategic resources have become one of the primary fronts of economic warfare over the latter half of the decade,’ the report notes.

Worst case scenario

In the fourth scenario, geopolitical dynamics worsen climate-induced food and water shortages, and there are more aggressive clashes between states. Geopolitics converts the natural resource crisis ‘from one of affordability to one of availability, creating a cascading economic, environmental and humanitarian crisis in all but a handful of select countries’.

States would exercise greater control over key resources, thereby fracturing alliances, worsening scarcity and escalating trade tensions that restrict the flow of climate technologies. Conflict across borders becomes more common, as a way of securing the supply of strategy resources.