Growing hunger for resources makes climate policy more unjust

Climate policy currently mostly focuses on the reduction of CO2 emissions, the so-called ‘carbon footprint’. But the solar panels, electric cars, nuclear power plants and windmills meant to reduce this footprint result in a new ‘gold rush’ for minerals such as copper, lithium and cobalt. An electric car needs up to four times as many resources as its fossil predecessor. Production chains of these minerals are notoriously obscure and unjust. By putting a material footprint at the centre stage instead of a carbon footprint, we connect the climate issue to resource extraction and justice issues, Jesse Hoffman, Darko Lagunas, Friedemann Polzin and Nikkie Wiegink argue.

“The European way of life appears to be the right to European wealth at other people's expense.” This is Member of the European Parliament Lara Wolters' (Dutch Labour), striking response to the fact that the Corporate Sustainability Due Diligence Directive (CSDDD) did not make it through the European Council in February 2023. These regulations aim to require corporations to identify, prevent, reduce and be accountable for negative effects on human rights and the environment in their own operations and production chains. This is because ‘our’ green transition depends on resources from elsewhere. In March, the European Council did adopt the ‘Critical Raw Minerals Act’, which is to help satisfy the hunger for resources of the EU.

From carbon footprint to material footprint

The material footprint and the involved production chains, just or unjust, need much more attention. The growing hunger for resources has disastrous consequences for the local population near mines, and regulations meant to protect people and nature are failing. Furthermore, it increases the power inequality between resource-rich countries and the places where these minerals are processed and used. Western countries are responsible for the consumption of 80-90 percent of the resources. Resource-rich regions themselves often barely profit from the transition; just like they barely profited from the fossil era before. The exploitation of resources mostly goes along the dividing lines drawn up in the 16th century during the era of European colonialism. Resource mining, both back then and now, is characterised by exploitation, environmental disasters, human-rights violations and armed conflicts.

Beyond resources as objects for profit

A second problem is closely connected to the financial sector. In the past twenty years, resources have become an important source of speculation. The trade in resources is managed by a handful of resource traders such as Glencore, Trafigura and Archer Daniels. These parties are middle men between the producers and buyers of resources. Since the 1990s, these parties have come up with financial products (futures, options, swaps) to reduce the investment risks and make more money from the trade in these ‘derivatives’ on financial markets at the same time. 

This ‘financialisation’ of the resource trade has resulted in a complex and opaque system, which is disconnected from the physical economy. It has led to maximalisation of financial profits becoming the most important motivation, which is sustaining the pressure on resource mining. It has also led to the system becoming so complicated that Environmental, Social and Governance criteria can barely be assessed. 

All in all, resource extraction has become interwoven with financial extraction. The only real alternative therefore seems to be to either greatly reduce the, out of control, financial incentive or completely remove it. That would mean: much more emphasis on justice, local ownership, regional industrialisation in the Global South and much less emphasis on growth.

Towards more just production chains

In times of growing hunger for resources, it might not be strange that a CSDDD directive faces much resistance from the European corporate lobby. By putting the material footprint at the centre stage instead of the carbon footprint, with attention for investment flows and knowledge of local communities, a blind spot disappears and we connect the climate issue to resource mining and broader justice issues. The focus on a material footprint is not a holy grail, but it does provide a flashlight in the dark. A searchlight in obscure production chains in which relations between industry here and mines far away are often invisible. This is a necessary first step to making connections and responsibilities discussable and eventually building a more just future.

  • Jesse Hoffman is a political scientist and researches just transitions, imagination and political innovation, and has ties to the Urban Futures Studio and the Copernicus Institute for Sustainable Development.
  • Darko Lagunas is an environmental sociologist and does PhD research in the coloniality of the energy transition, resource problems and decolonial practices working towards plural futures.
  • Friedemann Polzin researches the energy transition as an economist and is tied to the Utrecht School of Economics and the Sustainable Finance Lab.
  • Nikkie Wiegink is an anthropologist at the Utrecht University Faculty of Social and Behavioural Sciences and does research into corporate sovereignty, resource mining and resettlement, in regions such as Mozambique.

In the upcoming years, the Resourcefulness Project at Utrecht University researches the way in which critical minerals gain value and meaning in production chains, and what its effects on social justice and social injustice are. With help from the financial sector and the corporate world, among others, we hope to gain insight and transparency into these chains.