Jharkhand’s Just Transition—a roadmap for economic growth and diversification – Institute for Energy Economics and Financial Analysis (IEEFA)

Report on Jharkhand’s Just Transition and Alignment with Sustainable Development Goals

Executive Summary

This report outlines a strategic roadmap for Jharkhand’s transition from a fossil fuel-dependent economy to a low-carbon model, in alignment with India’s national climate objectives and the global Sustainable Development Goals (SDGs). The transition represents a critical challenge and a significant opportunity to advance key SDGs, including SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action). A planned, just transition can mitigate fiscal risks, create sustainable employment, and ensure long-term socio-economic development, thereby contributing to SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).

Our analysis indicates that strategic investment in low-carbon sectors will generate a net positive budgetary impact of approximately Rs6.7 lakh crore (US$79.3 billion) between 2026 and 2070, offsetting revenue losses from coal and bolstering the state’s capacity to fund essential services aligned with SDG 3 (Good Health and Well-being) and SDG 4 (Quality Education).

Socio-Economic Context and SDG Imperatives

Fiscal Dependency and its Impact on SDGs

Jharkhand’s significant reliance on fossil fuels poses a substantial risk to its sustainable development trajectory. The state’s fiscal health is closely linked to the coal industry, which has direct implications for its ability to achieve the SDGs.

• Revenue Dependency: Fossil fuels contribute 32% to Jharkhand’s own revenue. A decline in this sector directly threatens the state’s ability to finance public services crucial for SDG 3 (Good Health and Well-being) and SDG 4 (Quality Education).
• Economic Vulnerability: The economic ecosystem, including employment and supply chains, is heavily reliant on fossil fuel industries. This dependency creates vulnerabilities that could undermine progress towards SDG 8 (Decent Work and Economic Growth) and SDG 1 (No Poverty) if the transition is not managed effectively.
• Inequality and Social Impact: Any revenue shortfall would disproportionately affect vulnerable communities, exacerbating existing disparities and hindering progress on SDG 10 (Reduced Inequalities).

Opportunities for Sustainable Development

Despite lagging in green transition metrics, Jharkhand possesses considerable potential to pivot towards a sustainable economy. Leveraging these opportunities is essential for achieving multiple SDGs.

1. Renewable Energy Potential (SDG 7): The state has abundant solar irradiation and biomass availability, providing a strong foundation for developing clean and affordable energy.
2. Industrial Base for Green Innovation (SDG 9): Jharkhand’s existing industrial infrastructure and critical mineral reserves can be repurposed for manufacturing low-carbon technologies.
3. Green Hydrogen Hub (SDG 7 & SDG 9): The state’s robust steel sector can serve as an anchor for green hydrogen demand, fostering innovation and sustainable industrialization.

Cost of a Just Transition: Investing in a Sustainable Future

A total investment of nearly US$256 billion (Rs22 lakh crore) is estimated to be required from 2026 to 2070 for a comprehensive and just transition. This expenditure should be viewed as a long-term investment in achieving a resilient economy and meeting the SDGs.

Breakdown of Transition Costs

• Coalmine Closure and Remediation (US$18.1 billion): This investment is critical for environmental restoration, directly supporting SDG 15 (Life on Land) and SDG 12 (Responsible Consumption and Production) by addressing the legacy of mining.
• Thermal Power Plant Decommissioning (US$5.7 billion): Retiring carbon-intensive assets is a direct action towards SDG 13 (Climate Action) and facilitates the shift required by SDG 7 (Affordable and Clean Energy).
• Worker and Community Support (US$12.5 billion): This allocation is fundamental to ensuring a just transition. It includes reskilling, compensation, and community infrastructure support, directly targeting SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).

Economic Diversification Strategy for SDG Achievement

To manage the transition effectively, this report identifies five priority sectors for economic diversification. These sectors are aligned with Jharkhand’s comparative advantages and are designed to accelerate progress across the SDG framework.

Priority Diversification Sectors

1. Renewable Energy and Energy Storage: Directly contributes to SDG 7 by increasing the share of clean energy and enhancing energy security.
2. Green Hydrogen and its Derivatives: Fosters progress on SDG 9 by building resilient infrastructure and promoting sustainable industrialization.
3. Low-Carbon Manufacturing: Advances SDG 9 and SDG 12 by developing sustainable production capabilities for technologies like electric vehicles and batteries.
4. Agroforestry and Land Restoration: Supports SDG 15 (Life on Land) and SDG 13 (Climate Action) through sustainable land management and carbon sequestration, while also improving rural livelihoods in line with SDG 1 and SDG 2 (Zero Hunger).
5. Community Resilience and Livelihoods: Focuses on building local capacity and creating alternative income streams, directly contributing to SDG 8, SDG 1, and SDG 11 (Sustainable Cities and Communities).

A Sustainable Finance Framework for the Goals

Mobilizing Capital through Partnerships (SDG 17)

Financing this large-scale transformation requires a coordinated strategy that leverages public, private, and multilateral capital, embodying the principles of SDG 17 (Partnerships for the Goals).

Key Financing Mechanisms

• Public Finance: Essential for funding social support measures and de-risking investments, ensuring the “just” component of the transition and supporting SDG 1, SDG 8, and SDG 10.
• Private Capital: Crucial for commercial-scale projects in renewable energy, manufacturing, and green hydrogen, driving the economic diversification needed for SDG 7 and SDG 9.
• Blended Finance Models: A proposed “coal asset retirement facility,” anchored by multilateral development banks, can blend grants and low-cost debt to finance environmental remediation (SDG 15) and asset repurposing.
• State-Level Platforms: Establishing a transition finance platform and a “green cell” can streamline investments and coordinate efforts, enhancing the effectiveness of partnerships as envisioned in SDG 17.

Conclusion

Jharkhand is at a pivotal moment. By adopting a well-calibrated Just Transition strategy, the state can move beyond mitigating the risks of decarbonization to actively seizing the opportunities for sustainable and inclusive growth. This roadmap provides a pathway for Jharkhand to not only diversify its economy but also to make significant and measurable progress towards achieving the Sustainable Development Goals in the coming decades.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses a multi-faceted transition for the state of Jharkhand, moving away from a fossil fuel-dependent economy towards a low-carbon, sustainable model. This complex process touches upon several interconnected Sustainable Development Goals (SDGs):

• SDG 7: Affordable and Clean Energy: The core theme is the shift from fossil fuels (coal) to low-carbon energy sources. The article explicitly mentions developing renewable energy resources like solar and biomass and investing in green hydrogen.
• SDG 8: Decent Work and Economic Growth: The article extensively covers the economic implications of the transition, including the risk to state revenues and employment in the coal sector. It proposes economic diversification into new low-carbon industries to create large-scale employment and drive long-term sustainable growth, embodying the principles of a “Just Transition.”
• SDG 9: Industry, Innovation and Infrastructure: The plan involves building new low-carbon capacity, upgrading the industrial base for manufacturing low-carbon technologies (like EVs and batteries), and decarbonizing the heavy-industry steel sector. This aligns with the goal of building resilient infrastructure and fostering sustainable industrialization.
• SDG 13: Climate Action: The entire initiative is framed within India’s national climate commitments, such as reducing emission intensity by 45% by 2030 and achieving net-zero by 2070. The transition plan for Jharkhand is a direct, sub-national strategy to contribute to these climate goals.
• SDG 15: Life on Land: The article addresses the environmental legacy of coal mining by quantifying the costs for “coalmine closures and remediation,” including “technical closure, biological reclamation, and post-closure monitoring.” It also identifies agroforestry as a potential sector for economic diversification.
• SDG 17: Partnerships for the Goals: The report emphasizes the need for a coordinated financial strategy, proposing a blend of “public, private and multilateral capital.” It suggests creating a “state-level transition finance platform” and leveraging Multilateral Development Banks (MDBs) to mobilize the necessary capital, highlighting the importance of partnerships.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the strategies and goals outlined in the article, several specific SDG targets can be identified:

1. Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
   • Explanation: The article highlights that Jharkhand lags the national average in renewable energy capacity (less than 12% vs. nearly 50%). The proposed transition focuses on leveraging the state’s “abundant solar irradiation, and substantial biomass availability” to build new low-carbon capacity, directly contributing to this target.
2. Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation.
   • Explanation: The report’s central recommendation is to manage the phase-down of coal by diversifying the economy into five priority sectors: renewable power, green hydrogen, EV and battery manufacturing, sustainable agriculture, and agroforestry. This strategy is designed to “more than offset revenue losses from coal assets” and drive sustainable growth.
3. Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies.
   • Explanation: The article details plans for “steel sector decarbonisation” and building an “industrial base suitable for manufacturing low-carbon technologies.” This involves retrofitting a major existing industry (steel) and building new, clean infrastructure for future growth.
4. Target 13.2: Integrate climate change measures into national policies, strategies and planning.
   • Explanation: The article presents a detailed, actionable roadmap for Jharkhand’s transition, which is a state-level plan directly aligned with India’s national climate goals (“reduce its emission intensity by 45% by 2030… and achieve net-zero emissions by 2070”). This demonstrates the integration of climate action into sub-national economic planning.
5. Target 15.3: By 2030, combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degradation-neutral world.
   • Explanation: The plan explicitly accounts for the cost of environmental restoration after fossil fuel extraction, estimating US$18.1 billion for coalmine closures, which covers “technical closure, biological reclamation, [and] post-closure monitoring.” This is a direct effort to restore land degraded by industrial activity.
6. Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.
   • Explanation: The article outlines a “sustainable finance framework” to mobilize the required US$256 billion. It proposes blending “public, private and multilateral capital” and suggests creating a “coal asset retirement facility’ anchored by multilateral development banks (MDBs),” which directly addresses the mobilization of finance from diverse sources.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article contains several quantitative and qualitative indicators that can be used to measure progress:

• Indicator for Target 7.2: The share of renewable energy in the state’s installed power capacity. The article provides a baseline figure for Jharkhand (“less than 12%”) and the national average (“almost 50%”), which can be tracked over time to measure progress.
• Indicator for Target 8.2: State revenue from diversified, low-carbon sectors. The article projects that “revenues from state goods and services tax (SGST), driven by economic diversification into low-carbon industries, are expected to surpass coal mining royalties after 2047.” The growth of SGST from these new sectors versus revenue from coal serves as a key financial indicator of successful diversification.
• Indicator for Target 13.2: Reduction in greenhouse gas (GHG) emission intensity. The article directly references India’s national target to “reduce its emission intensity by 45% by 2030 from 2005 levels.” Progress in decarbonizing Jharkhand’s energy and steel sectors would be a primary contributor to this national indicator.
• Indicator for Target 15.3: Area of land reclaimed and remediated. While the article focuses on the financial cost (US$18.1 billion for mine closures), this investment corresponds to a physical area of land that will undergo “biological reclamation.” The number of hectares of former mine land successfully restored would be a direct indicator of progress.
• Indicator for Target 17.3: Total capital mobilized for the transition. The article provides a total required investment figure of “nearly US$256 billion (Rs22 lakh crore)” from 2026 to 2070. Tracking the amount of public, private, and multilateral funds secured against this target would be a clear indicator of successful financial mobilization.

4. Summary Table of SDGs, Targets, and Indicators

Source: ieefa.org