Detail ÖFSE-Forum

Back to overviewÖFSE-Forum 85

Prices behind electro-mobility – Contestation around and beyond price determination and setting in the lithium global production network and extraction in Chile

Luisa Leisenheimer

Wien, August 2023 | 9783 902906 670

Minerals have gained much attention in the context of policies around ‘sustainability transformations’. A majority of countries in the Global North and South has pledged large-scale decarbonization efforts to reach the 1.5°Celsius goal of the Paris Agreement and place high hopes on ‘green’ technologies. A key element of such technologies are battery systems for electric vehicles and stationary forms of energy storage, which heavily rely on lithium – making the latter a critical commodity. While the problematic social and environmental impacts at places of minerals’ extraction have been debated, the issue of prices has been largely side-lined. However, the processes to determine world prices and their use in commodity transactions have important distributional implications for different actors and locations and impact on whether electro-mobility is socially and environmentally feasible and effective.

Luisa Leisenheimer's master thesis is about determining and setting prices in the lithium global production network, with a focus on the lithium sector in the key producer country Chile. The thesis combines in-depth theoretical engagement with detailed empirical investigation and shows that current price determination mechanisms lack transparency. The price setting is further linked to the lithium extraction in Chile and its embeddedness in historical and current political economy processes as well as the role of dominant lithium producers. The results show that it is difficult to take into account long-term risks and costs such as ecological degradation and social injustices within the current price determination and setting mechanisms.

The thesis provides new insights for academic and policy debates on the resource-intensive shift towards electro-mobility and the high demand for critical resources such as lithium created by green transition policies in the European Union and other regions. The results of this study are thus a critical reminder to take into account the financial dimension of commodity sectors and the political economy in producer countries to better understand distributional, social and ecological effects of increasing minerals extraction. This is also relevant for the creation of development cooperation projects that seek to promote responsible resource extraction.

Back to overview