Climate Transition in India: Unequal Distribution of Costs and Benefits

• 03 Jun 2023

Recently, a study conducted by researchers shed light on the unequal distribution of costs and benefits associated with the climate transition in India.

The key findings of the study are:

• Adverse Effects Concentrated in Economically Disadvantaged States: The adverse effects of the climate transition are primarily concentrated in economically disadvantaged states in eastern India, including Jharkhand, West Bengal, Odisha, and Bihar, which heavily rely on coal mining.
• Widening Gap between Poor and Wealthy Regions: Without compensatory measures, the gap between poor and wealthy regions in India is likely to widen significantly as a result of the climate transition.
• Impacts on Disadvantaged Regions: These regions would experience job losses, increased burden on poorer households, and pressure on energy-intensive industries.
• Affluent States as the Main Beneficiaries: Conversely, comparatively affluent states would be the biggest winners from ambitious climate policies.
• Importance of Short-Term Effects: Short-term effects play a decisive role in the enforceability of energy and climate policy measures.
• Challenges to Political Process: The concentration of short-term losers in specific regions can pose significant challenges to the political process of implementing climate protection, as seen in Germany's struggle to phase out coal.
• Need for New Social and Industrial Policies: The climate transition in India would require the implementation of new social and industrial policies to address regional resistance and competing interest groups.
• Mitigating Adverse Effects: To support the climate transition and mitigate its adverse effects, various measures can be employed, including utilizing carbon price revenues, careful siting of fossil-free energy production, compensation payments for coal phase-out, and financial aid from Western industrialized countries.
• Learning from Other Countries: Lessons can be learned from other countries such as South Africa, Indonesia, and Vietnam, where coal phase-out has been accompanied by financial aid from Western industrialized nations.