Life Cycle Based Rare Earth Externalities:Theory And Applications

Rare earths(RE)or rare earth elements(REEs)are a kind of important elements which have excellent optical,electrical and magnetic properties,and they play an important role in the development of high technology industries and green energy industries.With the endowment of abundant reserves and a wide range of REEs,rare earth industry has rapid development in China.Through 30 years development,China has already become the biggest rare earth produce,consume and supply country.However,owing to the short period of development,there are some flaws exist in the processing of rare earth production and separation,and the industrial chain still concentrated on low-end industrial chain.The exploitation of REEs in low-end industrial chain produce damages to the ecological environment,while the applications of REEs in high-end industrial chain has a very positive potential influence on human society and environment,the disequilibrium of externalities and benefits of REEs between low-end and high-end industrial chain is affecting and hampering the sustainable development of China's rare earth industry.For orienting to the sustainable development and exploitation of China's rare earths,and in order to realize the equilibrium of externalities and benefits of REEs between low-end and high-end industrial chain,this paper constructs the equilibrium theory and evaluation model of externalities and benefits based on rare earth life cycle,and applies the proposed theory and evaluation model on Bayan Obo deposit,the biggest rare earth deposit in China,to verify the feasibility of the proposed theory and model,and analyzes the distribution disciplinarian of rare earth external cost and external revenue in its industrical chain.Through applying the evaluation model on the REO production in Bayan Obo,the results show that the externality of REO production in Bayan Obo is negative externality,the external cost regarding to production of lton of REO at Bayan Obo is 34,000 yuan in 2013,mainly come from air and water pollution,which accounts for 70%of the total external cost.The market value of 1 ton of REO is 102660 yuan,mainly comprises neodymium and praseodymium oxide,which constitutes 75%of the market value.The external cost constitutes 33%of the market value,while the actual external cost paid by Baotou Steel Rare-Earth accounts for about 22%of the market value.The external cost in the REO production has not compensated at all,unpaid external cost is assumed by surrounding ecological environment and residents,this make the ecological environment and human health situation worsen.Through applying the evaluation model on the NdFeB magnet production and application and wastes recycling in Bayan Obo,the results show that the market value of I ton of NdFeB magnet is 440 thousand yuan in 2013,the externality of NdFeB magnet production and application is positive externality,the external benefit is 420 thousand yuan,mainly comes from the contribution of application of NdFeB magnet in final products to human society.The market value of 1 ton of REO recycled from NdFeB magnet wastes is 240 thousand yuan in 2013,its externality is positive externality,and the external benefit is 31 thousand yuan per ton,mainly comes from the decreasing of damages on environment in the mining and smelting of raw ore and improving the utilization rate of rare earth resources.As shown in the evaluate results,along with the extension from mining to application of rare earth industrial chain,the externality of the stage in rare earth life cycle will change from negative externality to positive externality,as well as the proportion of external benefit in the value chain will increase.The inspiration for reality is that state can levy moderate tax from rare earth upstream enterprises to compensate external cost,and provide subsidy for rare earth downstream enterprises to compensate external benefit,and therefore to motivate upstream enterprises to move up into downstream industries,and through optimizing the smelting technology,decreasing the discharge amount of waste gas and waste water,rare earth enterprises could decrease the external cost;though expanding industrial chain,entering the terminal application market,promoting the development of the REE recovery and recycling industries,rare earth enterprises could increase external benefit,and ultimately promote the sustainable development of the enterprise and the whole rare earth industry.