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Governance and Risk–Value Constructions in Closing Loops of Rare Earth Elements in Global Value Chains

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  • Erika Machacek

    (Centre for Minerals and Materials, Geological Survey of Denmark and Greenland (GEUS), Øster Voldgade 10, 1350 Copenhagen, Denmark)

  • Jessika Luth Richter

    (International Institute for Industrial Environmental Economics (IIIEE), Lund University, Tegnérsplatsen 4, 221 00 Lund, Sweden)

  • Ruth Lane

    (Human Geography, School of Social Sciences, Monash University, Wellington Road, Clayton, Victoria 3800, Australia)

Abstract

This article addresses a research gap on the challenges—specifically risk and value—connected to realizing the potential for closing loops for rare earth elements (REE). We develop an analytical framework from conceptual elements of the global value chain (GVC) framework and the relational theory of risk to examine several empirical REE industry cases for loop closure. The aim of the paper is to identify how risk–value relationships are constructed by different actors as governance structures form in transactions prior to price setting and how these have impacts on the closure of REE loops. Often, REE loops are not closed, and we find that constructions of the risk–value relationship by industrial actors and by government agencies are unstable as they pursue different motivations, consequently hindering REE loop closure in GVCs. In light of this, we propose that governments mediate against the construction of risk–value relationships by facilitating information on the characteristics of end-of-life materials that qualify these for re-entry into loops.

Suggested Citation

  • Erika Machacek & Jessika Luth Richter & Ruth Lane, 2017. "Governance and Risk–Value Constructions in Closing Loops of Rare Earth Elements in Global Value Chains," Resources, MDPI, vol. 6(4), pages 1-25, October.
    • Handle: RePEc:gam:jresou:v:6:y:2017:i:4:p:59-:d:116248
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    References listed on IDEAS

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