Franz & McNelly: Finance, Extraction, and the Green Transition
In The “Finance-Extraction-Transitions Nexus”: Geographies of the Green Transition in the 21st Century, Tobias Franz (Economics, University of London, UK) and Angus McNelly (International Relations, University of Greenwich, UK) break down the relationship between finance capital, mineral extraction, and the environmental and the societal implications of the green transition.
The green transition is a process of replacing fossil fuels with green energy to prevent global climate collapse. Green technology, which produces green energy, requires natural resources such as lithium, nickel, copper, and cobalt. As the demand for green energy increases, the demand for mineral extraction also increases, leading to higher prices (financial capital). This created a new process the authors call the hegemonic green transition – a transition from one system to another that preserves the preexisting structures of capitalism from the first, heightening the role of finance in the green transition. To better understand this shift in the role and influence of finance capital, Franz and McNelly developed a new conceptual framework, the “finance-extraction-transitions nexus.”
To develop the “finance-extraction-transitions nexus,” the authors draw on academic debates on the links between finance and development, the role of finance in climate change governance, international financial subordination, and Marxist ecology.
This framework relies on the idea of “frontiers.” Capitalism is a system that is always expanding and therefore pushing into new frontiers. In Franz and McNelly’s analysis, frontiers are not exclusively geographical but can also be ideological, such as resource frontiers, commodity frontiers, and finance frontiers. The green transition, positioned within capitalism, involves processes of frontier-making as it produces more frontiers of green technology and mineral extraction.
The authors hope this framework will allow for critical research of transitions beyond the financialized, socio-technical scope dictated by capitalism. The authors also highlight areas for future study, such territorial expansion of capitalism through the emergent resource frontiers. The “finance-extraction-transitions nexus” framework provides a way to identify underlying contradictions and highlight the complex geographies and environmental implications of the green transition.
