Decarbonizing Odisha’s economy: Regional CGE–MESSAGEix analysis of a coal-rich Indian state

India’s commitment to achieving net-zero emissions by 2070 requires state-level strategies for low-carbon economic transitions. This study develops a state-specific macroeconomic framework linked to an energy system model to assess the investment needs and employment impacts of decarbonization. Focusing on Odisha, an eastern coastal state producing 23% of India’s coal and 44% of mineral output, with a high industrial GDP share, we construct a 49-sector computable general equilibrium (CGE) model and soft-link it with a bottom–up MESSAGEix model. Studies utilizing integrated CGE–MESSAGEix models at the subnational or regional level in India remain limited. The integrated approach evaluates the economic and employment impacts of alternative low-carbon pathways, capturing inter-sectoral and national-global linkages. The findings indicate that fossil-fuel taxation with revenue recycling and renewable energy investment, if applied in isolation, may dampen growth. However, combining renewable energy development policies with energy efficiency and productivity gains mitigates adverse effects, supporting a sustainable transition. In the policy scenario, while coal sector jobs decline, overall employment rises, highlighting opportunities for a just transition in resource-dependent states.