Navigating the complexities of the green transition: Insights from recent research

Dr Tobias Franz introduces new research that delves into the complexities of the green transition, shedding light on its relationship with finance, extraction industries and the implications of this shift.

In the ever-evolving landscape of global economics and environmental sustainability, few challenges loom as large as the imperative to transition from fossil fuels to renewable energy sources. This monumental undertaking, often referred to as the "green transition," is not just a technological shift but a profound transformation that reshapes the very foundations of our economic and social systems.

My recent paper, co-authored with Angus McNelly from the University of Greenwich and published in Antipode, delves deep into the complexities of this green transition, exploring the intricate relationship between finance, extraction industries, and the material, socio-economic, and environmental implications of this monumental shift.

A surge in transition minerals

Historically, major transitions in energy systems, such as the rise of fossil capital or the shift from coal to oil, have heralded significant changes in the global economy. The transition to green energy sources represents another such transformative moment, with far-reaching implications for the future of our planet.

At the heart of this transition lies the challenge of meeting the increased demand for natural resources essential for the production of renewable technologies.

At the heart of this transition lies the challenge of meeting the increased demand for natural resources essential for the production of renewable technologies. Known as "transition minerals," these resources include lithium, nickel, copper, and cobalt, and they have already experienced a surge in demand and political interest in recent years. Analysts predict that this demand will only continue to escalate, leading to what some have termed a "commodity supercycle."

Any financialized green transition driven by the replacement of fossil fuel technologies with their "green" counterparts hinges on the extraction of transition minerals like copper, lithium, nickel, and cobalt. This quest for transition minerals opens up vast new resource frontiers under the banner of climate change mitigation.

A green transition has broader implications for global capitalism

Throughout this article, we navigate the intricate terrain of the green transition, uncovering the dynamic interplay between finance and extraction industries and the broader implications for global capitalism. We showcase that this transition presents a Herculean task complicated by wider, radical shifts within global capitalism.

The initial impetus for tackling climate change came from grassroots movements and progressive policymakers. However, the green transition has now become a focal point for governments and capital alike. This has led to the emergence of what we term the "hegemonic green transition," a socio-technical shift driven primarily by capital interests.

The initial impetus for tackling climate change came from grassroots movements and progressive policymakers. However, the green transition has now become a focal point for governments and capital alike.

In response to this complex landscape, our paper introduces the concept of the "finance-extraction-transitions nexus." This conceptual framework captures the interplay between finance capital, mineral extraction, and the broader implications of the green transition. Drawing on recent critical debates on capitalism, extractivism, financialization, and international financial subordination, the nexus offers a lens to evaluate the wider geographies produced by the financialized green transition and the processes of natural resource extraction it relies upon.

The complex contradictions and implications of the green transition

While we intentionally refrained from delving deeply into specific strands of literature, our interdisciplinary approach allowed us to draw on various critical perspectives to construct our focus point. By transcending static and linear understandings of the green transition, we were able to illuminate the limitations of the hegemonic green transition and highlight the intertwined relationship between finance, extraction, and the reorganisation of capitalism's boundaries.

Looking ahead, there are several areas for further exploration. Investigating the empirical workings of our nexus requires a closer examination of financial instruments, actors, and institutions driving green transition efforts. Additionally, analysing the territorial expansion of capitalism and the role of the state in promoting finance-led green development are crucial avenues for future research.

In conclusion, our "finance-extraction-transitions nexus" offers a critical lens for understanding transitions beyond the narrow confines of current socio-technical approaches. By shedding light on the contradictions inherent in the hegemonic green transition, our focus provides a foundation for future studies to explore the complex geographies and implications of the green transition. 

Image credit: Señor Ashraf via Unsplash

This blog is a summary of 'The “Finance-Extraction-Transitions Nexus”: Geographies of the Green Transition in the 21st Century', co-authored by Tobias Franz and Angus McNelly.