Geopolitical fragmentation and the green energy transition: systemic reconfiguration across energy and critical metal markets

The global energy transition is unfolding within an increasingly fragmented geopolitical environment in which energy security, climate policy uncertainty, and critical mineral dependence interact. This study examines whether upward and downward movements in geopolitical risk generate structurally different patterns of shock transmission across energy and transition-metal markets. Using monthly data from June 2012 to September 2025, we apply a component-based asymmetric TVP-VAR connectedness framework to the Energy Transition Metals Index, the aggregate Energy Index, Climate Policy Uncertainty, and disaggregated geopolitical risk categories. The positive and negative components are estimated as separate systems and interpreted on a variable-specific basis rather than as mechanically uniform stress and relaxation states. The findings show that connectedness is stronger in the upward-movement system than in the downward-movement system, with total connectedness reaching approximately 12.6% compared with 11.3%. The Energy Transition Metals Index is the largest net receiver in both systems, while geopolitical risk categories particularly war escalation, terrorist threats, and terrorist acts serve as prominent shock transmitters. These results indicate that geopolitical fragmentation is associated with a more concentrated vulnerability structure around transition-metal markets, although the analysis identifies variance transmission rather than direct causal effects on decarbonization. From a climate-governance perspective, the findings suggest that critical-mineral exposure can reduce policy predictability and complicate coordination across energy-security and decarbonization objectives. The study contributes by combining relational asymmetry, critical-mineral dependence, and time-varying systemic connectedness within a unified framework. • Geopolitical risk reshapes the green transition through network reconfiguration. • Systemic interaction intensifies during geopolitical stress periods. • Transition metals emerge as persistent net receivers of volatility. • Risk escalation centralizes shock transmission across markets. • Findings highlight structural vulnerability in climate governance.