There now exists a significant body of theoretically informed empirical research into ‘neoliberal environments’. It comprises numerous studies which together explore the connections between neoliberal principles and policies, on the one side, and the biophysical world on the other. However, making sense of them is by no means straightforward, despite their common focus on neoliberal environments. It is currently left to readers of these studies to synthesise them into a wider, joined-up account of neoliberal environments. This and two companion articles aim for precisely this sort of broad and coherent understanding. The contribution of this second instalment is to present an overarching political economic theory of ‘neoliberal environments’. By synthesising concepts from the work of Karl Marx, Karl Polanyi and James O’Connor, this article presents a framework for thinking about how neoliberal policies relate to the biophysical world.