Sustainable Strategies for the Indian Coal Sector: An Econometric Analysis Approach

Thermal power generation based on coal has been identified as the second largest polluting industry due to the greenhouse gas emissions caused by coal combustion. The pollution caused by this industry is not limited to power generation, but it also manifests itself throughout the use of products. Although a huge emphasis has been placed on replacing coal-based power generation with renewable resources, we showed that Indian power generation will depend on coal for more than fifty percent of its demand in the near future. In our study, we utilized a combination of linear cointegration, non-linear cointegration, ARIMA, and the VECM to forecast the use of coal based on the Indian industrial index and the amount of electricity generated through coal combustion required to meet the demand. Given that pollution and carbon emissions are inherent in the coal usage cycle, we drafted policy implications and recommendations to mitigate the consequences, green the coal usage cycle, and improve the coal supply chain.

Automated summary

Thermal power generation based on coal is the second largest polluting industry due to greenhouse gas emissions. The pollution extends beyond power generation and affects product usage as well. Despite efforts to replace coal with renewable resources, our study shows that India will still heavily rely on coal for over 50% of its power generation in the near future. To address the inherent pollution and carbon emissions from coal usage, we used various models to forecast coal consumption and proposed policy implications to improve the coal supply chain and mitigate the consequences.