As the world attempts to decarbonise and meet the Paris agreement of limiting global warming to 1.5 degree celsius, a transition from fossil fuels to renewable sources of power is underway. Traditional sources of energy such as coal, oil and gas are making way for solar, wind and hydro power. These transitions are typically thought of as national scale events, requiring overarching national policy solutions. Although this is somewhat true, the consequences of these transitions are local.
While this transition will come with new economic opportunities, through green jobs and the development of new technology for example, there will also be downsides that need to be managed: renewable energy sources rely on specific geographical features, like a lot of wind, water or sun. If these are not located where the old energy sources were, then the economic opportunities arising from the transition will move along with the supply.
This will mean while some regions will benefit, others will not. And overcoming these challenges will depend on interventions that help local economies adapt to the transition.
India is no exception. At present, 70 percent of its electricity comes from coal-fired thermal power plants. It has pledged to produce 50 percent of its energy requirements from cleaner sources by 2030. This target, roughly nine years away, means the country will have to transition fast, as it is doing, to more use of sources like solar energy.
This will not be without local economic challenges. The maps below show where the winners and losers in this transition could be and that India too must think locally to decarbonise successfully.
Losers
Map 1: Coal and renewable power plants are in different geography, source: WRI
Map 2: Energy mix of each state will have to catchup, source: Energy Map of India
80 percent of coal in India is produced in Odisha, Chhattisgarh, Jharkhand, and Madhya Pradesh. Telangana, Maharashtra, and West Bengal are other key states. In Jharkhand, coal, direct and indirectly, is responsible for around one in ten of all formal jobs in the state. Informal employment is hidden, but estimates suggest, for every formal job, there are four informal jobs – stretching the state’s economic reliance on it further.
Winners
Map 3: Potential to generate solar energy differs for each state, source: IREF
Map 4: Potential to generate wind energy also differ for each state, source: MNRE
While the states that will lose out from the energy transition are primarily based in the East of the country, the states that will gain from it will be in the western and southern part of India – Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Karnataka. This is because their climates are particularly suited to harnessing solar and wind energy. Large and cheap distributions of land to harness this will also help, as compared to other parts of the country. Of the 1.3 million permanent and temporary jobs that may be created as a result of the transition, most of them will be located in these states.
Local consequences, local solutions
Map 5: Districts vulnerable to energy transition, source: Just Transitions Initiative
But even the above picture is not nuanced enough. 60 districts across the country are the most vulnerable to the transition and some of these are in states more likely to gain. Five, for example, are in Maharashtra, meaning that there may be opportunities for the state to replace fossil fuel jobs with ones arising from cleaner energy. In Jharkhand, the most affected state, this will not be an option and a one-size-fits all state policy to support this economic transition is unlikely to work. For example, Ramgarh, one of the most affected regions, is also home to a nature reserve and has a lack of basic road infrastructure. Investing in both roads and biodiversity could mitigate the impact, via improved productivity and tourism. Meanwhile, in Godda, where steel manufacturing is prevalent, investing in technology that requires less coal in production could sustain its industry.
To respond to the energy transition then, action must be considered at all levels of government – from the national to the district level. At present, as shown in our report Localising Green Transitions in India, local governments can play a greater role in managing this transition, helping state governments, like Jhakhand, figure out what is best for its diverse set of districts, making the most of a union level framework and support. By doing so, the country can make the most of its energy transition, maximising the number of winners the transition can create, while minimising those who could lose out in a changing world.
Sam Downes also contributed to this post.
