Solidarity in Supply: Five Global Justice Policies for Decarbonising Transport

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Solidarity in Supply: Five Global Justice Policies for Decarbonising Transport

Executive Summary

Drawing on interviews with workers in the automotive industry, this briefing examines policies for transport decarbonisation that support global justice. The current reliance of zero emissions vehicle technologies on lithium-ion batteries, which use several raw materials connected to social and ecological harms including the “transition minerals” lithium and cobalt, poses challenges to a just transition in the transport sector. These harms are not inevitable but derived from the current system through which metals and minerals are produced, owned and traded. Ultimately, a just strategy for decarbonising vehicle manufacturing and its attendant supply chains must be designed with two core principles in mind: international solidarity and reparation for the unequal foundations of climate crisis. This briefing outlines five policy approaches to ensure justice for workers in all stages of the supply chain for the zero-carbon transportation system of the future:

[.num-list][.num-list-num]1[.num-list-num][.num-list-text]Management of demand for transition minerals.[.num-list-text][.num-list]

The UK is set to use far more lithium and cobalt for electric vehicles than its share of global reserves by population. [1] Expanding access to zero carbon public transportation and investing in battery recycling can reduce overall demand and ensure supplies of transition minerals are sufficient for decarbonisation across the world.

[.num-list][.num-list-num]2[.num-list-num][.num-list-text]Mandatory supply chain due diligence and standards.[.num-list-text][.num-list]

International standards in transition mineral supply chains are not mandatory, and mining companies rarely implement them in full. [2] This leads to both ecological damage and breaches of free, prior and informed consent for communities living near extraction sites. Legislation and public procurement can be used to ensure mandatory standards are met in transition mineral supply chains.

[.num-list][.num-list-num]3[.num-list-num][.num-list-text]Fair employment practices.[.num-list-text][.num-list]

During interviews conducted for this briefing, workers in the UK automotive industry raised the importance of better employment practices and an increased role for employees in governance during the transition to zero emissions vehicle production, both in the UK and across connected supply chains. Government can encourage this within domestic production and use procurement to ensure that union recognition is mandated throughout its global supply chains.

[.num-list][.num-list-num]4[.num-list-num][.num-list-text]Fair taxation and distribution of profits.[.num-list-text][.num-list]

Mining multinationals, many of which are headquartered in the UK, have been the biggest recipients of post-pandemic “excess profits”, partly due to short-term commodity supply shocks. [3] Earmarking taxation revenue from these excess profits can fund wealth transfers to countries involved in the nationalised extraction of transition metals.

[.num-list][.num-list-num]5[.num-list-num][.num-list-text]Reparative trade and a new approach to “climate finance”. [.num-list-text][.num-list]

Current frameworks of both international trade and “climate finance” (money transfers to fund climate crisis mitigation or adaptation) inhibit the ability of Global South countries to invest in green industrial strategies for transport decarbonisation. Structural reform of trade rules and the transformation of climate finance can help address climate debts held by Global North countries while enabling the global coordination of decarbonisation.

Full Text

[.green]1[.green] Global Justice in Battery Supply Chains

[.quote][.quote-text]My philosophy and ethos is [that] I’d never ask a [union] member to do anything I wouldn’t be willing to do myself. So…if I wouldn’t be willing to send myself or a family member into those working conditions, then we should be as a movement trying to push for international legislation.[.quote-text][.quotee]Jason Powell, Plant Convenor, BMW Hams Hall[.quotee][.quote]

[.quote][.quote-text]We have to stand in solidarity. They’re not cheap and easy words because the simple idea is we hear the term ‘race to the bottom’. When we look at it, we need to ensure health and safety standards, Ts and Cs and conditions of work are raised to a standard where we’re all at a certain level and a human level.[.quote-text][.quotee]Steve Bush, Unite National Officer for Automotive[.quotee][.quote]

Transport produces 15 per cent of all global greenhouse gas emissions. [4] In the UK, transport makes up more than a fifth of overall emissions. [5] Decarbonising land transport in the UK and worldwide is, therefore, essential to mitigating climate crisis. A successful transition to zero-carbon transport can reduce a key source of emissions, drive a shift to more public and multi-modal forms of travel and secure the future of key green industries in the UK. [6] Yet current technologies for transport decarbonisation rely on the increased use of raw materials, which are increasingly a source of global conflict and competition. [7]

The lithium-ion batteries that power the electric buses, cars, bikes and scooters essential to the mobility system of the future require two “transition minerals” already in short supply. Production of these minerals — lithium and cobalt — is likely to surge over the coming decades to meet rising demand for electrified mobility. The International Energy Agency predicts that demand for lithium will increase 40-fold relative to 2020 levels by 2040, and cobalt between 20 and 25-fold. [8] Replacing the UK’s conventional cars with electric vehicles would require twice the amount of cobalt currently produced worldwide and three quarters of lithium currently produced. [9] Not only would this decarbonisation pathway eclipse present supplies of transition minerals, but supply chains for lithium-ion batteries currently carry significant social and ecological risks.

The majority of global lithium reserves are concentrated on the Andean salt flats which cut across the Chilean, Argentine and Bolivian borders. On the Salar de Atacama which lies on the Chilean part of the salt flats, lithium production requires upwards of two million tonnes of water per day. [10] This places at risk the region’s biodiversity as well as agriculture in Atacama oases, which has been present in varied forms for millennia. [11] More than 70 per cent of global cobalt production is concentrated in the Democratic Republic of Congo, where child labour is a regular practice in both the industrialised and informal mining industries. [12] According to the Global Environmental Justice Atlas, the mining of transition minerals is related to least at 273 ongoing conflicts including resistance from local communities, breaches of consent for extraction and environmental degradation. [13] Communities living near lithium extraction sites in Chile, Argentina, Northern Portugal and Serbia have protested the risks that lithium mining poses to water access, biodiversity, and in some geographic contexts, to indigenous sovereignty. [14]

In July 2022, the UK government announced a Critical Minerals Strategy primarily focused on securing the resilience of the supply of transition minerals to the UK. [15] The strategy suggests that government should encourage better environmental and social standards within transition mineral supply chains while increasing battery recycling rates, although it does not set mandatory regulation to ensure either. The focus of the strategy is, however, the diversification of supply chains to improve the UK’s position against those government deems geopolitical rivals. [16] This approach risks necessary international cooperation over a finite resource and increases the potential for conflict over the mineral supply of differing power blocs.

Conflict, competition and human rights abuses are not inevitable to the extraction of these raw materials; rather, extraction currently forms part of a political economy in which the shareholders of multinational companies — many of which are headquartered in the UK, US, Switzerland and Australia — profit. The profits derived from individual direct share ownership flow disproportionately to global elites: for instance, the richest one per cent of UK households own 39 per cent of total individual holdings of UK-listed shares. [17]

For this research, we interviewed union reps in the UK automotive sector, who supported the improvement of working conditions across international supply chains for electric vehicle production. They argued that UK workers should stand in solidarity with those facing precarious and dangerous conditions in mineral extraction both on a human level and to raise global labour conditions overall. While on a superficial level the unregulated extraction of transition minerals could enable an expansion of the UK automotive sector to the short-term benefit of UK workers, our interviews reflected widespread support for policies that secured labour conditions worldwide and solidarity with those working across global supply chains. These strongly-held principles demonstrate the need to design policies for transport decarbonisation that ensure justice for workers extracting and processing the raw materials to produce the zero emissions transportation of the future, alongside good conditions in manufacturing hubs in the UK.

Solidarity from countries in the Global North [18] is also owed to the primarily Southern countries involved in the extraction of transition minerals, which have contributed relatively little to climate crisis. Between 1850 and 2002, Global North countries produced at least triple the greenhouse gas emissions of Global South countries in which 85 per cent of the world’s population live. [19] Between 1990 and 2015, the poorest half of the world’s population were responsible for just seven per cent of cumulative emissions. [20] Most poor and middle-income countries facing the sharpest effects of climate crisis also contend with often-entwined legacies of European colonial rule and US foreign intervention. In the Andean region for instance, the extraction of precious metals has continued for more than five centuries; indeed, the Spanish empire in the Andes extracted mineral wealth through the enslaved or coerced labour of African, African descendant and indigenous people. [21]

Former imperial metropoles owe a debt to the Global South in both accumulated wealth and cumulative carbon emissions. Designing strategies for the decarbonisation of Global North economies thus requires attempts to address these debts and ensure justice for workers in both Global North and South. The policy priorities explored below are the initial steps of such an approach to the decarbonisation of transport.

[.green]2[.green] Policy Priorities

[.quote][.quote-text]I’ve took on board what the members in our plant were always going on about. More holidays, shorter working week. They were more into that than actual increases in pay, so for the last two years prior to this year I’d focused our pay talks around reduction in the working week and more holidays and we achieved them.[.quote-text][.quotee]Frank Duffy, Plant Convenor, GKN Driveline[.quotee][.quote]

To ensure that the shift to the production of zero emissions modes of transport in the UK makes fair use of transition minerals while enabling a globally just process of transport decarbonisation, government should:

[.num-list][.num-list-num]1[.num-list-num][.num-list-text]Expand public and low-carbon modes of travel to manage the UK’s demand for transition minerals.[.num-list-text][.num-list]

Invest in a comprehensive expansion of the UK’s public transport system, increasing access to zero-emissions forms of collective travel such as electric buses and trains while limiting reliance on more resource-intensive private vehicles. This expansion should also include a transition to private electric vehicles for people that need them, such as those with limited mobility related to health or age, and the provision of mobility hubs. Through the implementation of a green industrial strategy for transport manufacturing, government should ensure that domestic production of zero-emissions vehicles of all kinds is at the heart of the transition. A key component of demand reduction will be investment in the rapid scaling of the UK’s battery recycling capacity to ensure that all used electric vehicle batteries are recovered by 2035, and the rate at which used lithium and cobalt are recycled for new batteries reaches 95 per cent. [22]

[.num-list][.num-list-num]2[.num-list-num][.num-list-text]Expand public and low-carbon modes of travel to manage the UK’s demand for transition minerals.[.num-list-text][.num-list]

Mandate current OECD and UN standards and free, prior and informed consent for communities affected by extraction in the UK’s supply chains for lithium-ion batteries. Use public procurement to encourage the use of shorter, more direct supply chains for transition minerals to support artisanal mining cooperatives where possible, with a view to supporting the expansion of public sector mining in the long term.

[.num-list][.num-list-num]3[.num-list-num][.num-list-text]Encourage fairer employment practices.[.num-list-text][.num-list]

Work with unions to implement a shorter working week in domestic production and mandate union representation on company boards in the UK. Use public procurement to mandate union recognition across the whole supply chain.

[.num-list][.num-list-num]4[.num-list-num][.num-list-text]Introduce fair taxation to fund wealth transfers to the extractive frontline.[.num-list-text][.num-list]

Earmark taxes on the “excess profits” of global mining companies headquartered in London for wealth transfers to countries involved in the extraction of transition minerals, supporting public sector mining efforts in the Global South. [23]

[.num-list][.num-list-num]5[.num-list-num][.num-list-text]Reform restrictive international trade regulations and prohibitive modes of “climate finance” that inhibit green industrial strategies in the Global South.[.num-list-text][.num-list]

Reject the inclusion of regulations in future UK trade deals that restrict Global South countries from introducing green industrial strategies for transport, including Investor State Dispute Settlement (ISDS) mechanisms and renegotiate ISDS and other restrictive clauses in existing deals. Support the introduction of a climate waiver for Paris Agreement commensurate policies at the World Trade Organisation. Commit to a new funding stream for climate-related loss and damage payments to Global South countries based on direct cash transfer while supporting an independent debt-cancellation mechanism for countries that need it to cancel both public and private debts and free fiscal space for climate crisis mitigation. [24]

[.green]3[.green] Managing UK Demand for Transition Minerals

Overall commodity prices are surging after a series of supply shocks. Demand for transition minerals is set to rise rapidly over the next two decades and there is little prospect of a commensurate increase in supply. Destructive conflict and competition — rather than international cooperation — is therefore a significant risk with respect to transition mineral supply chains. On its current trajectory, the UK is set to contribute to this process by using more than its global “fair share” (by population) of transition minerals. [25] Projections suggest that the UK will use one and a half times its share of lithium for electric vehicle batteries by 2035, increasing to more than four times by 2050. [26] Cobalt projections are similar with the UK set to use twice its fair share by 2035 and more than five times by 2050. [27] Not only could this increase dangerous competition over finite raw materials, but it could also inhibit transport decarbonisation in other countries, thereby compromising action on the inherently global issue of emissions reduction. Managing mineral demand is therefore critical to the global decarbonisation of transport.

Increased public transport provision will reduce the overall demand for transition minerals in the UK. Through investment in electric buses, the electrification of rail, and zero-carbon mobility hubs, which connect public transport to residential areas with e-bikes and scooters, greater access to shared transportation will reduce the need for private vehicles requiring lithium-ion batteries. [28] Alongside this, planning and regulation can limit the usage of private vehicles in cities with extensive public transport systems other than when needed, for instance by people with limited mobility. [29] The development of a more accessible public transport system would also produce the greatest benefits for low-income households. While 90 per cent of UK households in the highest income decile own one car or more, only 35 per cent of households in the lowest decile have a car. [30] Households in the highest income quintile drive more than double the miles per year of those in the lowest quintile, which indicates higher discretionary use. [31] Improving access to public transport will therefore have the most significant impact on low-income households reliant on public and active travel options.

Moreover, investment in public transport manufacturing can form part of a comprehensive industrial strategy to decarbonise the UK automotive industry, securing good green jobs, thriving manufacturing hubs, and reducing emissions. [32] In Germany, union representatives have pointed out that some of the automotive industry’s production capacities could be quite easily converted to public transport manufacturing. [33] This could help address the reduced demand for components in electric vehicles compared to internal combustion engine vehicles and ensure secure employment for those in currently at-risk parts manufacturing jobs. [34] Planning and industrial coordination alongside investment in a system of decarbonised public transport can therefore help maintain manufacturing jobs while reducing overall demand for transition minerals.

Alongside the expansion of public transport infrastructure and manufacturing in the UK, the development of battery recycling capacity in the UK will help reduce demand for newly mined lithium and cobalt. The UK government has started research and development to improve the recyclability of lithium-ion batteries. The Faraday Battery Challenge — run by the government’s battery manufacturing development centre — aims to increase lithium-ion recyclability from current levels of 10 to 50 per cent to 95 per cent by 2035. [35] With government coordination and planning, battery recycling facilities can also provide a source of secure work in the zero carbon economy. [36] While both the European Commission and the European Parliament’s Environment, Public Health and Food Safety Committee have advocated for minimum battery collection targets to mandate recycling, the UK government’s Critical Mineral Strategy highlights the need for battery recycling without setting out regulation or investment in new capacity.

The current direction of research and development and government’s recognition of the need for battery recycling represent useful steps forward yet given the necessity of scaling both electric vehicle and battery production in the UK by 2030, rapid progress to increase recycling capacity is needed. If recycling capacity is scaled at pace internationally, lithium demand projections could fall by 25 per cent and cobalt by 35 per cent. [37] This indicates the critical role battery recycling will play in managing demand for transition minerals. While the use of transition minerals is essential, advancing public transport provision alongside scaling recycling capacity will ensure that the UK’s demand does not limit global efforts to decarbonise transport.

[.green]4[.green] Mandatory Supply Chain Standards

Limiting demand for transition minerals can help ensure that transport decarbonisation does not use more than the population’s share of raw materials, but mandatory supply chain standards are also necessary to restrict social and ecological harms resulting from mining. Lithium mining in Chile is highly water intensive, risking fragile desert ecologies, livelihoods, and communities, while indigenous communities in the Atacama Desert have protested the lack of prior consultation for new and increased mining production. [38] The OECD and UN set out mostly voluntary due diligence principles for human rights practices in mining, but almost half of companies reviewed through the Corporate Human Rights Benchmark did not fulfil any of the principles outlined and 90 per cent of companies carried out less than half the due diligence steps. [39] This reflects the need for mandatory guidelines, through legislation on companies using battery raw materials in the UK, to ensure that metals and minerals essential for the transition are produced with respect to indigenous sovereignty, human rights and biodiverse ecologies.

In 2020, the European Commission proposed mandatory due diligence rules for companies sourcing battery raw materials which are, as of October 2022, going through the EU legislative process. [40] The UK government, however, has suggested it will “boost global environmental, social and governance (ESG) performance” in transition mineral supply chains without detailing either mandatory standards or how this performance will be measured. [41] As shown by the failure of mining companies to follow the UN’s voluntary due diligence principles, without a set of mandatory standards, this supposed ESG performance is unlikely to improve.

Free, prior and informed consent is the first principle sought by many indigenous groups and campaigners to ensure that mining projects respect the needs of their local communities. This means communities who live on or near extraction sites having to give their consent without coercion or manipulation based on full information about mining activities before operations begin. [42] In the US for instance, where domestic lithium production is a core aim of the Biden administration, four fifths of all lithium deposits are within 35 miles of indigenous reservations. [43] Free, prior and informed consent is critical to respecting the sovereignty of indigenous peoples from the Atacama Desert to the Thacker Pass in Nevada over mining production on or near their land. The UK government should therefore support the introduction of both national and international legislation to ensure mandatory due diligence and free, prior and informed consent in transition mineral supply chains. [44] This would help ensure that increasing demand for minerals does not result in further ecological degradation and breaches of indigenous sovereignty.

Battery production in the UK through public majority ownership — as outlined in a companion briefing to this paper [45] — can also increase public oversight of mineral procurement and enable procurement policies that mandate OECD guidelines. Increased public procurement in the transition to zero carbon transport can further support improved labour conditions in the artisanal (informal) mining sector which is a far greater employer worldwide than industrial mining. Artisanal mining is often undertaken by individuals, small groups and cooperatives, rather than large companies, with the use of less machinery than in industrial projects. [46] Despite the focus of multinational companies on issues such as child labour in artisanal mining, social harms and exploitative conditions are not exclusive to the artisanal sector. [47] War on Want argue that 100 million people depend on the artisanal sector and are often excluded from profits further down the supply chain. [48] Public procurement of transition minerals could be directed to the development of shorter supply chains, initially enabling existing artisanal mining cooperatives to share mining wealth rather than enforcing a transition to industrial sectors, with a view to the expansion of the public sector in the long term. The introduction of both mandatory standards for battery supply chains as well as the active use of public procurement can therefore improve both social and ecological conditions.

[.green]5[.green] Fairer Working Conditions Across the EV Supply Chain

[.quote][.quote-text]The IG Metall model [German trade union] …their influence they’ve got through seats on the [BMW] supervisory board is absolutely massive. …Everything is approved by the supervisory board. The union IG Metall are involved in everything. …They’ve recognised that the power sits on there and if you put your workers representatives on there, your union representatives, ultimately, they’re involved in the decision making …I’d be a big advocate of seeing that.[.quote-text][.quotee]Dave Elson, Site Convenor, Rolls Royce[.quotee][.quote]

The current lack of mandatory standards puts working conditions across the entire transition mineral supply chain at risk. The extension of public ownership, planning and procurement policies could facilitate fairer working conditions, from gigafactories and the production of electric vehicles to lithium mining. The UK-based automotive trade union reps we interviewed set out the key conditions that they would like to see in the zero-emissions manufacturing sector of the future. While the UK government would be able to collaborate with trade unions to improve working conditions domestically, especially in majority public-owned industries, active public procurement policies can also facilitate better working conditions across the whole supply chain.

During our interviews with automotive union reps, a shorter working week at the same rate of pay was central to demands on terms and conditions. In a recent survey, 56.1 per cent of automotive workers said that they currently work less than a 40 hour week. [49] A reduction in hours would not necessarily result in a four day week but still reflects the significant demand for working time reform. Responding to a question on the most important future conditions for automotive workers, Jason Powell, the convenor for the BMW Hams Hall plant, answered “a shorter working week … [with the] same pay”. This was echoed by other reps many of whom cited the importance of a shorter working week to their members. These views are captured in a recent survey of Unite automotive workers in which 48.9 per cent of respondents answered that they would prefer fewer hours to their current working week. [50]

In taking majority ownership of parts of the supply chain such as battery production (outlined in a companion briefing on the role of public ownership in the domestic battery industry to facilitate a just transition in UK automotive manufacturing [51]), government would be able to use its influence over management to push for improved conditions such as a shorter working week. Alongside this, government can mandate union positions on boards which automotive workers also raised as a key demand, helping to democratise governance of their companies. Despite the enhanced control of parts of the sector provided by public ownership, which would create space for the planning of production, political will or union pressure (or both) would be necessary to ensure worker demands are met while steps toward democratic governance across the sector would be essential.

Further, as the reps highlighted, securing better working conditions for both domestic and supply chain workers is necessary not only to align with principles of international solidarity but to level global working conditions, reducing the risk of a “race to the bottom” and the footloose movement of investment. Improving the conditions of workers across the electric vehicle supply chain is therefore important to the security of domestic manufacturing jobs.

To help raise conditions globally, setting procurement policies at majority public owned battery manufacturing plants would mandate that the transition minerals used to produce lithium-ion batteries are sourced from companies which recognise trade unions. Mandating union recognition across the global supply chain would help improve working conditions by increasing the collective bargaining power of workers. Coordination with the global union in the mining sector, IndustriALL, would also be necessary to ensure that recognised unions genuinely represent workers. Reparative trade policy, as explored below, can also help increase the role of the public sector in the extraction of transition minerals in Global South countries. Together with improved trade union rights this can support the improvement of working conditions across the whole supply chain.

[.green]6[.green] Taxation of Excess Profits and Wealth Transfers to the Extractive Frontline

With short term increases in commodity prices, global mining companies have seen the sharpest rise in profits of the 308 largest UK-listed non-financial businesses since the start of the pandemic. [52] Long-term demand spikes in transition minerals also raise the prospect of further profits for mining firms. Transforming the ownership of mineral extraction and the transition mineral supply chain is essential to ensure that workers and mining communities — as well as countries reliant on commodity exports — retain their fair share of wealth produced through mining. While mining companies often promise to “support” mining-affected or indigenous communities through royalties payments or by funding new infrastructure, agreements often fail to materialise. [53] In February 2021, the Chilean government started arbitration against chemical company Albemarle over a failure to pay millions in royalties. [54] As part of the process of promoting alternative models of ownership, taxation of the short-term excess profits of mining firms can fund reparative wealth transfers to Global South countries and help expand publicly owned production.

The largest increases in profit since the start of the pandemic have been in the basic materials sector, which includes mining, energy and consumer non cyclicals. [55] Overall profits in this sector have increased by £37 billion compared to pre-pandemic levels. Most of these profit increases are concentrated in mining multinationals. At Q4 in 2021, the highest profit increases in large UK-listed non-financial firms were all at mining companies: Rio Tinto increased profits by £12.9 billion, BHP by £11.2 billion and Anglo American by £8 billion. [56] All three companies had over 30 per cent profit rates while BHP and Rio Tinto’s profit rates climbed above 50 per cent. [57] Despite sharp rises in profit post-pandemic, companies across the basic materials sector have barely increased capital expenditure while they have more than doubled dividends and share buybacks since 2020.[58] The benefits of mineral extraction are therefore directed to the shareholders of multinational companies at a scale which, we argue in a previous report, reflect “windfall profits”. [59] As major multinational mining companies including Rio Tinto and Anglo American are headquartered in the UK, increased taxation of these excess profits could, as explored below, fund the expansion of the public sector across the battery supply chain.

Within the “lithium triangle” (the Andean region cutting across Chile, Bolivia and Argentina home to most of the world’s lithium reserves), progressive governments have recently sought to increase the role of the public sector in transition mineral production. In 2017, the Bolivian government founded Yacimientos de Litio Bolivianos (Bolivian Lithium Reserves) to extend part public ownership over lithium production and to promote vertical integration of the sector. [60] Through a series of partnerships with the private sector, the government has sought to produce lithium cathodes, manufacture batteries and electric vehicles to ensure the highest-possible value-added to the Bolivian economy from extraction. [61] Although domestic battery production is not planned to start until 2025, attempts to retain wealth from the extraction of transition minerals are aimed at maximising the surplus retained by one of the poorest countries in South America.

In Chile, President Gabriel Boric has proposed the creation of a public lithium company. [62] While this measure would not nationalise the existing operations of Albemarle and SQM, it would present a step change in Chilean lithium policy since SQM (previously a public chemical company) was gifted by former dictator Augusto Pinochet to his son-in-law and ensure that the Chilean public retains greater surpluses from extraction during the global process of decarbonisation. [63] Enclave production, through which private companies have exported their surpluses while retaining little connection to local economies, has formed a historic trend within the Chilean mining sector since the nineteenth century. [64]

The taxation of multinational companies benefitting from price surges could form part of a reparative transfer of wealth to help enable the expansion of public sector-led production in countries which see few of the profits of extraction. Hypothecating UK tax income from excess profits in mining can start the process of reparative transfer, channelling a share of wealth produced in the transition to extractive frontlines.

[.green]7[.green] A Reparative Trade Package

While taxation presents a promising short-term option to channel resources to Global South countries attempting to retain mineral surpluses, reform to trade policy is needed to ensure lower- and middle-income countries can also deploy green industrial strategies to decarbonise transport. Structural reforms to both transfers of “climate finance” — which as explored below are often implemented through market-rate loans that hinder the pace of decarbonisation — and trade deals can facilitate the decarbonisation of transport in both Global North and Global South. Increases in grant finance transfers and preferential trade between Northern and Southern countries can also help address the deeply unequal legacies of European colonialism and inequalities in the production of carbon emissions.

In the current system of UN climate negotiations, commercial loans and insurance can be used to meet “climate finance” agreements for developing countries to mitigate climate crisis. As a result, between 2017 and 2019, 40 per cent of public climate finance commitments under the $100 billion per year by 2020 pledge adopted at the COP15 negotiations were offered to low-income countries to as “non-concessional loans”, meaning that they must be repaid at market rates and with often punitive terms regarding default or repayment schedules.[65] Rather than helping countries decarbonise, these interest payments can create a substantial burden for poorer governments, thereby directly inhibiting Southern states from using public investment to drive decarbonisation or climate adaptation. As part of cooperative efforts to decarbonise economies across the world, the UK government could push for debt relief for Global South countries while paying climate reparations for loss and damages produced through emissions in the Global North.[66] This would increase the capacity of Southern states to implement their own industrial strategies focused on transport decarbonisation.

Alongside reforms to climate finance, a new approach to the system of international trade is required to ensure that countries further up battery supply chains are not inhibited from taking measures to invest in green industries. At present, World Trade Organisation (WTO) trading rules are designed to prevent “barriers to trade” which, according to those promoting a “free trade” model can include state interventions in industrial production. [67] The Investor State Dispute Settlement (ISDS) mechanism further gives private investors the capacity to sue governments whose policies they determine could undermine profits, even where these policies seek explicitly to protect workers or the environment. [68] Private companies can seek legal action against states they deem to “indirectly expropriate” their assets, for instance through environmental regulation on mining or consultation with an indigenous community leading to a mining permit being refused. [69]

Policies such as local content requirements in manufacturing, which use state subsidies as incentives can also contravene WTO legislation. [70] Trade rules thus currently curtail the ability of Global South governments to invest in green industrial strategies. Although legal scholars have identified some mechanisms through which states could protect themselves, these are options to help navigate potential disputes rather than a solution to restrictive trade rules. [71] UK government should, therefore, promote a climate waiver at the WTO to exempt all Paris Agreement commensurate policies, reject the inclusion of ISDS in future trade deals and renegotiate existing treaties to facilitate the removal of ISDS and any other restrictive clauses. Alongside reparative grant transfers, these adjustments to trade rules can help enable green industrial strategies in Global South contexts as part of the rollout of transport decarbonisation globally.

[.green]7[.green] Conclusion

The essential process of transport decarbonisation in the UK requires a rounded policy approach to ensure just conditions for workers in vehicle manufacturing and across global supply chains. This approach should include ambitious proposals that address domestic production and battery recycling along with structural reforms to global supply chain standards, trade legislation and procurement policies. International cooperation, instead of resource competition, is needed to make decarbonisation feasible beyond a select few national contexts and to enable the overall mitigation of climate crisis. The shareholders of global mining firms are currently set to benefit from the transition to zero carbon mobility, but political and policy ambition can instead ensure that the wealth produced during the transition is shared in common throughout the global population.


[#fn1][1][#fn1] Susan Evans, Heather Plumpton and Libby Peake, “Critical point: securing the raw materials needed for the UK’s green transition”, Green Alliance, 2021. Available here.  

[#fn2][2][#fn2] “A Material Transition: Exploring supply and demand solutions for renewable energy minerals”, War on Want, 2021. Available here.

[#fn3][3][#fn3] Chris Hayes and Carsten Jung, “Prices and Profits After the Pandemic”, Institute for Public Policy Research and Common Wealth, 2022. Available here.

[#fn4][4][#fn4] Jim Skea et al, "Climate Change 2022: Mitigation of Climate Change", IPCC Working Group III, 2022. Available here.

[#fn5][5][#fn5] Terri Wills, “The UK’s transition to electric vehicles”, Climate Change Committee, 2020. Available here.

[#fn6][6][#fn6] For more detail on the role that decarbonising transport can play in developing green industries in the UK see: Khem Rogaly and Adam Almeida, ”Owning the Gigafactory: The Foundation of a Just Industrial Strategy for Automotive Manufacturing, Common Wealth, 2022. Available here.

[#fn7][7][#fn7] For an overview of conflicts related to transition minerals see for example “Mapeando los impactos de la minería parala transición energética en las Américas / Mapping the mining impacts of the energy transition in the Americas”, Environmental Justice Atlas, 2022. Available here.

[#fn8][8][#fn8] “The Role of Critical Minerals in Clean Energy Transitions”, International Energy Agency, 2021. Available here.

[#fn9][9][#fn9] Richard Herrington, “Mining our green future”, Nature Reviews Materials, 2021, 6, pp. 456-458.

[#fn10][10][#fn10] Bárbara Jerez, Ingrid Garcés and Robinson Torres, “Lithium extractivism and water injustices in the Salar de Atacama, Chile: The colonial shadow of green electromobility”, Political Geography, 2021, 87, pp. 1-11.

[#fn11][11][#fn]Matías Calderón-Seguel, Manuel Prieto, Oliver Meseguer-Ruiz, Freddy Viñales, Paulina Hidalgo and Elías Esper, “Mining, Urban Growth, and Agrarian Changes in the Atacama Desert: The Case of the Calama Oasis in Northern Chile, Land, 2021, 10, pp.1-21.

[#fn12][12][#fn12] Henry Sanderson, “Congo, child labour and your electric car”, Financial Times, 19th July 2021. Available here.

[#fn13][13][#fn13] “A Material Transition: Exploring supply and demand solutions for renewable energy minerals”, War on Want. Available here.

[#fn14][14][#fn14] Thea Riofrancos, “Shifting Mining From the Global South Misses the Point of Climate Justice”, Foreign Policy, 7 February 2022. Available here.

[#fn15][15][#fn15] “Resilience for the Future: The UK’s critical minerals strategy”, Department for Business, Energy and Industrial Strategy, 2022. Available here.

[#fn16][16][#fn16] Ibid.

[#fn17][17][#fn17] “Do dividends pay our pensions?”, Trades Union Congress, Common Wealth and the High Pay Centre, 2022. Available here.

[#fn18][18][#fn18] The Global South is defined here as encompassing the formerly colonised countries of Africa, Asia, Latin America and Oceania as well as economically marginalised countries within Europe while the Global North is understood to be the “core” of former European colonial powers as well as the US, Canada, Australia and New Zealand. The definitions used in the analysis and secondary literature cited vary, however. For a range of definitions of Global South see for instance Sebastian Haug, “What or where is the ‘Global South’? Asocial science perspective”, London School of Economics Blog, 28th September 2021. Available here.

Kevin Gray and Barry K. Gills, “South-South cooperation and the rise of the Global South”, Third World Quarterly, 2016, 37, pp.557-574.

[#fn19][19][#fn19] Harpreet Kaur Paul, “Towards Reparative Climate Justice: from Crises to Liberations”, Common Wealth, 2021. Available here.

[#fn20][20][#fn20] Ibid.

[#fn21[21][#fn21] See for instance Kris Lane, Potosi: The Silver City That Changed the World, University of California Press: 2019 and Orlando Bentancor, The Matter of Empire: Metaphysics and Mining in Colonial Peru, University of Pittsburgh Press, 2017.

[#fn22][22][#fn22] Elsa Dominish, Nick Florin and Rachael Wakefield-Rann, “Reducing new mining for electric battery metals: responsible sourcing through demand reduction strategies and recycling”, Institute for Sustainable Futures, 2021. Available here.

[#fn23][23][#fn23] Hayes and Jung, “Prices and Profits After the Pandemic”, Institute for Public Policy Research and Common Wealth. Available here.

[#fn24][24][#fn24] “Debt and the climate crisis: a perfect storm. Why climate justice must include debt justice”, Jubilee Debt Campaign, 2021. Available here.

[#fn25][25][#fn25] Evans, Plumpton and Peake, “Critical point: securing the raw materials needed for the UK’s green transition”, Green Alliance. Available here.

[#fn26][26][#fn26] Ibid.

[#fn27][27][#fn27] Ibid.

[#fn28][28][#fn28] Yonah Freemark, Billy Fleming, Caitlin McCoy, Rennie Meyers, Thea Riofrancos, Xan Lillehei and Daniel Aldana Cohen, “Toward a Green New Deal for Transportation: Establishing New Federal Investment Priorities to Build Just and Sustainable Communities”, Climate and Community Project, 2022. Available here.

[#fn29][29][#fn29] “Brum: the green future of an automotive heartland. Envisioning the future of green transport and EV production”, Common Wealth and AA Groundlab, 2022. Available here.

[#fn30][30][#fn30] Stephen Frost, Becca Massey-Chase and Luke Murphy, “All Aboard: A plan for fairly decarbonising how people travel”, Institute for Public Policy Research, 2021. Available here.

[#fn31][31][#fn31] See National Travel Survey distance travelled by real income quintile: “Travel by household income quintile and main mode or mode”, Department for Transport, 2022. Available here.

[#fn32][32][#fn32] Rogaly and Almeida, “Owning the Gigafactory: The Foundation of a Just Industrial Strategy for Automotive Manufacturing”, Common Wealth. Available here.

[#fn33][33][#fn33] Nora Demitry, Gloria Koepke and Sarah Mewes, “Just transition in the European automotive industry”, Next Economy Lab, 2022. Available here.

[#fn34][34][#fn34] On reduced demand for components in EVs see “Merge ahead: Electric vehicles and the impact on the automotive supply chain”, PricewaterhouseCoopers, 2019. Available here.

[#fn35][35][#fn35] “Transitioning to zero emission cars and vans: 2035 delivery plan”, Department for Transport and Office for Zero Emission Vehicles, 2021. Available here.

[#fn36][36][#fn36] On broader job creation opportunities in the “circular economy” see: Zoe Avison and Sam Alvis, “Levelling up through circular economy jobs”, Green Alliance, 2021. Available here.

[#fn37][37][#fn37] Dominish, Florin and Wakefield-Rann, “Reducing new mining for electric battery metals: responsible sourcing through demand reduction strategies and recycling”, Institute for Sustainable Futures. Available here.

[#fn38][38][#fn38] Jerez, Garcés and Torres, “Lithium extractivism and water injustices in the Salar de Atacama, Chile: The colonial shadow of green electromobility”, Political Geography.

[#fn39][39][#fn39] Khem Rogaly and Adam Almeida, “Owning the Gigafactory: The Foundation of a Just Industrial Strategy for Automotive Manufacturing”, Common Wealth, 2022. Available here.

[#fn40][40][#fn40] Vivienne Halleux, “A new EU regulatory framework for batteries”, European Parliamentary Research Service, 2022. Available here.

[#fn41][41][#fn41] “Resilience for the Future: The UK’s critical minerals strategy”, Department for Business, Energy and Industrial Strategy. Available here.

[#fn42][42][#fn42] “Free, Prior and Informed Consent (FPIC)”, Earthworks, [undated]. Available here.

[#fn43][43][#fn43] “Biden’s Defense Production Act Order and Four Key Ways to Ensure Supply Chain Justice”, Climate and Community Project, 2022. Available here.

[#fn44][44][#fn44] “A Material Transition: Exploring supply and demand solutions for renewable energy minerals”, War on Want. Available here.

[#fn45][45][#fn45] Rogaly and Almeida, “Owning the Gigafactory: The Foundation of a Just Industrial Strategy for Automotive Manufacturing”, Common Wealth. Available here.

[#fn46][46][#fn46] “Artisanal and Small-Scale Mining”, EU Science Hub: Raw Materials Information System, 2022. Available here.

[#fn47][47][#fn47] For the approach of some multinational companies such as Glencore to artisanal mining see Sanderson, “Congo, child labour and your electric car”, Financial Times. Available here.

On the extent of social harms through both the industrial and artisanal sectors see “A Material Transition: Exploring supply and demand solutions for renewable energy minerals”, War on Want. Available here.

[#fn48][48][#fn48] “A Material Transition: Exploring supply and demand solutions for renewable energy minerals”, War on Want. Available here.

[#fn49][49][#fn49] Alex de Ruyter, Sally Weller, Ian Henry, Al Rainnie, Gill Bentley and Beverley Nielsen “Enabling a just transition in automotive: evidence from the West Midlands and South Australia”, British Academy, 2022. Available here.

[#fn50][50][#fn50] Ibid.

[#fn51][51][#fn51] Rogaly and Almeida, “Owning the Gigafactory: The Foundation of a Just Industrial Strategy for Automotive Manufacturing”, Common Wealth. Available here.

[#fn52][52][#fn52] Hayes and Jung, “Prices and Profits After the Pandemic”, Institute for Public Policy Research and Common Wealth. Available here.

[#fn53][53][#fn53] Todd C. Frankel and Peter Whoriskey, “Tossed Aside in the ‘White Gold’ Rush”, Washington Post, 19 December 2016. Available here.

[#fn54][54][#fn54] Fabian Cambero, “Albemarle says it regrets Chile’s call for arbitration over lithium royalties”, Reuters, 22 February 2022. Available here.

[#fn55][55][#fn55] Hayes and Jung, “Prices and Profits After the Pandemic”, Institute for Public Policy Research and Common Wealth. Available here.

[#fn56][56][#fn56] Common Wealth analysis using the Refinitiv database.

[#fn57][57][#fn57] Ibid.

[#fn58][58][#fn58] Hayes and Jung, “Prices and Profits After the Pandemic”, Institute for Public Policy Research and Common Wealth. Available here.

[#fn59][59][#fn59] Ibid.

[#fn60][60][#fn60] “Misión y Visión”, Yacimientos de Litio Bolivianos, [undated]. Available here.

[#fn62][61][#fn61] Linda Hancock, Natalie Ralph and Saleem Ali, “Bolivia’s lithium frontier: Can public private partnerships deliver a minerals boom for sustainable development?”, Journal of Cleaner Production, 2017, 178, pp.551-560.

[#fn62][62][[#fn62]] Thea Riofrancos, “Chile: White Gold Rush”, Chatham House: The World Today, 2022. Available here.

[#fn63][63][#fn63] Ibid.  

[#fn64][64][#fn64] Martín Arias, Miguel Atienza and Jan Cademartori, “Large mining enterprises and regional development in Chile: between the enclave and cluster”, Journal of Economic Geography, 2014, 14, pp.73-95.

[#fn65][65][[#fn65] Tracy Carty, Jan Kowalzig and Bertram Zagema, “Climate Finance Shadow Report 2020: Assessing Progress Towards the $100 Billion Commitment”, OXFAM and Grow, 2020. Available here.

[#fn66][66][#fn66] Katie Gallogly-Swan and Miriam Brett, “A Climate Retrofit for UK Trade”, Common Wealth, 2020. Available here.

[#fn67][67][#fn67] Ibid.

[#fn68][68][#fn68] Ibid.

[#fn69][69][#fn69] Oliver Hailes, “Lithium in International Law: Trade, Investment and the Pursuit of Supply Chain Justice”, Journal of International Law,2022, 25, pp.148-170.

[#fn70][70][#fn70] Ibid.

[#fn71][71][#fn71] Ibid.