A sectoral view of conceptualising macroeconomics of a ‘just transition’ in India

Abstract

In light of India’s COP26 commitment of reaching net zero by 2070, it is important to understand how India could ensure a ‘just transition.’ Since the transition raises several questions regarding who will benefit from it and who will lose out, this paper offers an assessment of the sectors that will be impacted most by the transition. This includes coal, mining, power, formal manufacturing sectors, and MSMEs. Macroeconomic consequences of the transition in terms of employment intensity, energy intensity, the total value added, and export competitiveness of the above-mentioned sectors have been examined. Using data from the Annual Survey of Industries for 2017-18 and 2018-19 and key informant interviews, the paper presents a sectoral analysis of the transition in the Indian context. In terms of employment, the power and the coal sector will be affected the most. In terms of fuel use, manufacturing sectors that either use coal or purchase electricity (indirectly using coal) will also be impacted. The spatial dimension of the transition will be very important, since certain coal-producing districts will be affected the most.