India's just energy transition: Political economy challenges across states and regions

In this paper, we study the potential distributional effects of an energy transition from the perspective of Indian states. We assess impacts on the distribution of household income, the competitiveness of energy-intensive industries, and employment in coal-related occupations and renewable energy. Our results highlight that states would be very unevenly affected by a climate policy aligned with the targets of the Paris agreement. An Indian energy transition would risk adversely impacting poverty reduction, employment and regional economic development. We find that the disadvantageous outcomes of an energy transition would be highly concentrated in a few Eastern states, which are home to a high proportion of India's low-income population. These states are among the country's major coal producers and are at the same time relatively dependent on energy-intensive industries. This also holds true in terms of net effects; Eastern states won't benefit from substantial employment creation related to RE sources from current RE expansion plans, which would mostly accrue to Western states. Some Western states are not only richer, but are already less dependent on coal and energy-intensive industries.