Michael Jakob, Matthias Kalkuhl, Robert Marschinski, Michael A. Mehling, Joschka Wanner

MIT Center for Energy and Environmental Policy Research Working Paper 2025-17. Cambridge, MA: Massachusetts Institute of Technology, 2025. 30 pp.

The fragmentation of global supply chains and rising geopolitical tensions have spurred concerns about import dependence. These concerns are particularly pronounced for clean energy technologies and critical raw materials, which are not only essential for climate change mitigation but are also viewed as important drivers of future productivity gains and economic growth. This paper contributes to the debate by analyzing challenges related to import dependence from the perspective of market failures, asking under which circumstances import dependence is the symptom of a market failure. On this basis, we discuss ways to assess the benefits and costs of different policies that have been proposed to address import dependence, derive implications for policy makers, and identify future research needs.

Keywords: Clean Energy Technologies; Supply Chains; Market Failures; Policies; Diversification