Vulnerability Assessment of Mineral-Rich States to Energy Transition

This technical brief by the Climate Policy Initiative (CPI) assesses the vulnerability of five mineral-rich Indian states—Odisha, Chhattisgarh, Jharkhand, Madhya Pradesh, and West Bengal—to the energy transition. Using a multi-dimensional framework covering fiscal losses, physical climate risks, socioeconomic impacts, diversification potential, and political economy, the report ranks these states to identify where 'just transition' efforts should be focused. Odisha is identified as the most vulnerable state, while West Bengal is the least vulnerable among the five, although each faces distinct risks ranging from high revenue dependency to energy security concerns.

• Odisha is ranked as the most vulnerable state to the energy transition. Its vulnerability is driven by high exposure to physical climate risks as a coastal state and its receipt of the highest proportion of Corporate Social Responsibility (CSR) spending from public sector undertakings in fossil fuel mining and power generation. However, the state possesses significant renewable energy (RE) potential to maintain energy security during a transition.
• Chhattisgarh is the second most vulnerable state, characterized by the highest conventional fuel capacity among the assessed states and the largest proportion of its population dependent on solid fossil fuel mining. This results in high dependence on electricity for revenue and limited diversification options, compounded by very limited resilience to natural disasters despite low exposure to physical climate risks.
• Jharkhand ranks third in overall vulnerability and first based solely on solid fossil fuel production. The state is heavily reliant on fossil fuel mining for revenue, with over 25% of its revenue derived from this source. While it has the RE potential to replace fossil power plants, its ability to fund this transition is constrained by stretched state finances and a high average fiscal deficit.
• West Bengal is the least vulnerable of the five assessed states due to a more diversified economy and lower revenue dependence on fossil fuels. However, it faces risks to energy security because it has significant fossil power capacity but lower replaceable RE potential. Additionally, it has the highest fiscal deficit among the assessed states and a lower-than-average Good Governance Index (GGI) score.
• Madhya Pradesh is in a relatively better position than the other states due to lower revenue dependence on fossil fuels. Its primary risk is the significant investment risk associated with the phase-down of its substantial fossil power capacity.
• The assessment identifies a high concentration of coal production in five eastern states—Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, and West Bengal—which account for approximately 85% of India's coal production. These states are often economically impoverished and rely on the fossil fuel economy for revenue, employment, and social program financing.

APA

Sen, V., Khurana, S., & Habib, T. (2023). Vulnerability Assessment of Mineral-Rich States to Energy Transition. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/05/Vulnerability-Assessment_Publication.pdf

Chicago

Sen, Vivek, Saarthak Khurana, and Tariq Habib. Vulnerability Assessment of Mineral-Rich States to Energy Transition. Climate Policy Initiative, 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/05/Vulnerability-Assessment_Publication.pdf.

Wikipedia

{{cite report |last1=Sen |first1=Vivek |last2=Khurana |first2=Saarthak |last3=Habib |first3=Tariq |title=Vulnerability Assessment of Mineral-Rich States to Energy Transition |publisher=Climate Policy Initiative |date=May 2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/05/Vulnerability-Assessment_Publication.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sen2023vulnerability, author = {Sen, Vivek and Khurana, Saarthak and Habib, Tariq}, title = {{Vulnerability Assessment of Mineral-Rich States to Energy Transition}}, institution = {Climate Policy Initiative}, year = {2023}, month = may, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/05/Vulnerability-Assessment_Publication.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }