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Abstract

The aim of this paper is to evaluate the economic and environmental effects of increasing indigenous coal share in electricity generation by using extended input–output analysis. The policy scenario is a $1 million increase in demand for investment in the coal mining sector. In order to analyze this policy option, we specifically developed an extended input–output analysis associated with disaggregating the electricity sector into electricity generation transmission and distribution and the mining sector into coal and oil–gas mining. Furthermore, we use a range of key economic and environmental indicators to evaluate the effects of increasing indigenous coal production on these indicators. The results indicate that the $1 million increase in final demand for indigenous coal produces an increase in economic output for all sectors of $1,389,241 and an increase in total greenhouse gases of 229,572 CO₂-equivalents (kg CO₂-e) as well.

Keywords

Indigenous coal use greenhouse gases air pollution input–output analysis Turkey’s economy

Introduction

Turkish electricity generation sector is a rapidly growing sector due to strong economic growth, rapid population increase and urbanization, and extension of electrification to the whole country because of rising per capita electricity demand (IEA, 2016). Over the past quarter century, the average annual growth rates of electricity generation and demand were both around 6.5% while the generation capacity grew by about 6.1%. During the same period, per capita electricity demand grew annually by 6.1% (Table 1).

Table 1.

Development of Turkey’s electricity generation industry (1990–2015).

	1990	2000	2010	2015	Average annual growth rate
Population (thousands)	56,473	67,845	73,723	78,741	1.5
GDP(current USD, million)	150,676	266,568	731,145	717,880	4.2
Installed power capacity (MW)	16,318	27,264	49,524	73,747	6.1
Gross electricity generation (GWh)	57,543	124,922	211,207	261,783	6.5
Gross electricity demand (GWh)	56,812	128,276	210,434	265,724	6.5
Per capita electricity demand (KWh)	1006	1891	2854	3375	6.1

Source: TUIK (2017) and IEA (2016).

As shown in Table 2, Turkey’s electricity is generated mainly from fossil fuels including natural gas, coal, and oil, which accounts for about 79% of total generation in 2014. The major fuel in electricity generation is natural gas (47.9%), followed by coal (30.3%), and at the lower end by fuel oil (0.9%). Due to the lack of nuclear energy, renewable resources come third in electricity generation, and the shares of such resources in power generation are as follows: hydro (16.1%), wind (3.4%), geothermal (0.9%), waste and biofuels (0.4%), and solar (0.1%). The major installed capacity sources are composed of hydropower plants with 34%, natural gas-fired power plants 26.9%, coal-fired power plants 21.3%, and wind 5.2% respectively.

Table 2.

Overview of electricity generation and capacity.

	Electricity generation		Installed capacity
Production and capacity from	GWh	%	MW	%
Coal	76,263	30.3	14,814	21.3
Gas	120,576	47.9	18,724	26.9
Oil	2146	0.9	82	11.8
Hydro	40,645	16.1	23,643	34.0
Wind	8520	3.4	3630	5.2
Geothermal	2364	0.9	405	0.6
Biofuels	1082	0.4
Solar PV	17	0.0	40	0.0
Waste	104	0.0
Other sources	246	0.1	50	0.0
Total production	251,963	100.0	69,520	100.0
Imports	7953	3.1
Exports	2696	1.0
Domestic supply	257,220
Energy sector own use	14,447	5.6
Losses	37,331	14.5
Final consumption	205,442

Source: IEA (2017) and TEIAS (2016).

In Turkey, the mix of electricity generation fluctuates each year due to the seasonal nature of the hydro resources and disabled or unavailable old lignite thermal power plants. For example, the hydropower production was at a low level of 40.6 TWh in 2014, while the production of hydropower averaged 47 TWh for the period of 2005–2015, or 22% of total generation. The share of hydro and natural gas in total electricity generation has been volatile. In recent years, while the share of coal in electricity generation has increased, the share of petrol has decreased gradually, while the share of natural gas has increased from 45% in 2005 to 48% in 2014 (IEA, 2016).

It is clear that Turkey mostly meets its energy demand from imported fossil fuels due to the very limited high-quality indigenous oil and natural gas resources it has. However, Turkey is rich in lignite reserves,¹ which are regarded as the essential component of the future energy supplies. More than 80% of the domestically produced lignite is used in electricity generation. In 2014, approximately 9,000 MW or 12% of total installed power generation capacity comes from the domestic (lignite) coal-fired power plants. With coal, nuclear energy, and renewable resources, the government hopes to play an important role in electricity generation and also in ensuring energy supply (IEA, 2016). Therefore, government attempts to cover its deficit of electricity generation and decrease its dependence on foreign energy resources namely natural gas. The main goal of Turkey’s energy strategy is to increase the amount of electricity generated from indigenous coal to 60 TWh by 2019 (MENR, 2015) and ultimately to generate electricity for all existing lignite and coal potential to ensure supply security. This approach has the potential to create certain global and national environmental issues that must be taken into account, among which carbon emission and its implications on climate change can be counted.

The proposed analysis in this paper evaluates economic and environmental impacts of using more domestic coal (lignite) in electricity generation on Turkish economy. Electricity generation for sustainable development is not only the main issue in Turkey, but it is also vital one for many countries around the world. Therefore, this issue has been studied on life cycle basis for developed or developing countries in literature. With the limits of life cycle analysis as a tool to assess sustainability (Bergerson and Lave, 2004), it is widely used as a tool for evaluation of the impact for a commodity to sustainable development because it is widely accepted and perfectly suited for evaluating the environmental, economic, and social sustainability (Atılgan and Azapagic, 2016). In the electricity generation literature, the life cycle assessment studies of Uchiyama (2007), Weisser (2007), Lenzen (2008), Hondo (2005), Denholm and Kulcinski (2004), and Gagnon et al. (2002) are the most comprehensive examples of electricity generation. In their assessments, these studies used one or more indicators, particularly greenhouse gas (GHG) emissions and energy accounting. Gagnon et al. (2002) take the widest range of indicators of sustainability into account with no consideration of social impacts. Life cycle assessment studies often employ not only process analysis but also input–output analysis. A number of studies (Heijungs et al., 2006; Heijungs and Suh, 2002; Hendrickson et al., 1998; Joshi, 1999; Lave et al., 1995; Lenzen, 2002; Matthews and Small, 2000; Suh and Huppes, 2005) have evaluated the impacts of environmental, economic, and social sustainability on electricity generation using input–output analysis. However, Atılgan and Azapagic (2016) study presents, for the first time, an integrated life cycle sustainability assessment of the electricity sector in Turkey, using multi-criteria analysis. Using input–output-based techniques with process analysis, comparing life-cycle inventories generally provide more comprehensive results since process analysis truncates inputs from higher upstream production processes lead to the system boundaries (Lenzen, 2002; Suh and Huppes, 2005).

The Turkey’s electricity generation sector has significant effects on environment, economy, and society. Although it is of great importance to measure and analyze the effects of sustainability on electricity generation, it has not been studied sufficiently. For this reason, the main purpose of this study is to measure the environmental, economic, and social impacts of the domestic coal-based power generation sectors in Turkey, using a sustainability assessment framework based on an economic input–output analysis. As one of the developing countries, the assessment of the impact of the increased domestic coal share in electricity generation on key economic and environmental indicators in Turkey is key to providing tools for planners and decision makers on the way to the sustainable development.

The paper is organized as follows: The underlying method, which is based on input–output techniques associated with data and policy scenario, is presented in the next section. Then, the results of economic and environmental impacts of analysis are carried out. Finally, the conclusions and policy recommendation are given.

Methodology, data, and policy scenario

Economic input–output analysis

The economic input–output analysis is a quantitative economic method that represents the interdependencies between different industries of examined economy, developed by Leontief (1941, 1966). Even though applications of the economic input–output model are based on a large body of literature, the most recent overviews are given by Miller and Blair (2009) and Rose and Miernyk (1989), which are also considered the best overviews.

Input–output analysis is known as a top-down linear macroeconomic approach of analyzing industrial structure. Sectoral monetary transaction data are used in an inter-industry model to evaluate the complex dependencies of industries in national economies. Even though the input–output analysis has been developed for economic analysis, extended input–output analysis has been implemented for energy and environmental issues since the late 1960s.²

Input–output analysis based on input–output table depicts the flow of goods and services through the sectors of the entire economy in terms of monetary exchange. Hence, the table shows how output from one industrial sector may become an input for another industrial sector by forming input–output matrix. This format therefore shows the monetary value of inputs to each sector at each column, and the value of each sector’s outputs at each row. As shown in Figure 1, the extended input–output table is composed of many blocks and commodity flows between sectors and final users. The intermediate flows (X_ij),³ core of the input–output table, look like two-dimensional matrix and describe the purchasing⁴ and the selling flows among the productive sectors in the first block. In the second block, a series of columns show the industry deliveries to the final demand (F_j) including household consumption and public expenditure, investments, and exports. The third part completes the matrix with the rows that represent the labor and capital incomes and the taxes.

Figure 1.

Schematic overview of extended input–output analysis.

It should be noted that if the total input equals the total output for the production sectors, then the input–output table is balanced. This means that the sum of each column must be equal to the sum of the each row of input–output table. Equation (1) represents the main equation of the input–output method

X = (I - A)^{- 1} F

(1)

where X is the total output of sector, I is the unit matrix, A is the technology matrix, F is the final demand. The matrix (I − A)⁻¹ is known as Leontief inverse matrix. The final demand is defined as the sum of household consumption (C), government expenditure (G), and formation of fixed capital (Z).

The comparative static analysis is based on a comparison of the equilibrium output values in the new equilibrium with the old (unchanged) equilibrium output values in the final demand. Before and after situations are only compared and the path of the variable is not considered. Therefore, it is sufficient to take the first difference of equilibrium equation (1)

Δ X = (I - A)^{- 1} Δ F

(2)

where ΔX = X^f− Xⁱ and X^f refers to the final value of equilibrium output, Xⁱ refers to the initial value of equilibrium output and ΔF = F^f− Fⁱ and F^f refers to the final value of equilibrium final demand and Fⁱ refers to the initial value of equilibrium final demand. It is noted that the difference of the inverse matrix is not taken into account due to the assumption that the technology remains constant when difference of equilibrium equation (1) is taken.

Economic input–output analysis can be extended by incorporating economic and environmental indicator vector of B_i into equation (2)

B_{i} = R_{i} X = R_{i} (I - A)^{- 1} F

(3)

where B is the vector of economic and environmental indicators, the subscript “i” denotes the type of burden (releasing GHG emissions and air pollutant into atmosphere through burning of fossil fuels), and R_i is a matrix that has diagonal elements representing the economic and environmental impacts per dollar of output for each process. It is defined as R_i = total external output/X_i.

Equation (4) is derived by taking first difference of equation (3)

Δ B_{i} = R_{i} Δ X = R_{i} (I - A)^{- 1} Δ F

(4)

Data and policy scenario

The policy scenario is designed to analyze the economic and environmental effects of increasing indigenous production of coal for power generation on Turkey’s economic sectors. As a policy scenario, the investment demand for indigenous coal production is supposed to increase by $1 million (see Figure 1). As is known, the investment demand is one of the final demands and it is defined as the exogenous variable as in equation (4). When we shock the investment demand for domestic coal production, we can measure the economic and environmental effects of this policy scenario.

Economic performance is a crucial factor for the possibility of increasing coal production due to the lack of indigenous energy production and thereby trade deficit in Turkish economy. Besides output, four economic indicators are considered for the economic assessment of this policy scenario. These are value-added, taxes less subsidies, trade deficit, and total hours worked by employees.

The environmental impact is evaluated through the potential for global warming due to GHG emissions that are generated from increasing domestic coal share in electricity generation in the context of Turkish energy policy.

As shown in Table 3, we have compiled national economic sector level data for 35 sectors of the Turkish economy, using World Input–Output Table (Timmer et al., 2015), additional data from Turkish Statistical Institute (Turkstat), and GTAP-Power Data Base (Peter, 2016). World Input–Output Database also provides the environmental accounts including CO₂ emissions and emissions to air (Genty, 2012).

Table 3.

Economic and environmental indicators.

	Indicator	Explanation	Units	Data source
Economic indicators	Output	Output at basic prices	$ million	WIOT, Inter country I/O Table for 2009
	Value-added	Compensation of employees, other net taxes on production and gross operating surplus	$ million	WIOD Socio Economic Accounts, July 2014 release
	Employment	Total hours worked by employees	hours	WIOD Socio Econ. Accounts, 2014 release
	Tax	Taxes less subsidies on products	$ million	WIOT, Inter country I/O Table for 2009
	Trade deficit	Imports minus exports	TL million	Turkstat
Environmental indicators	CO₂	Emissions of carbon dioxide	kilo tons	WIOD database, May 2012 release
	CH₄	Emissions of methane	tons
	N₂O	Emissions of nitrous oxide	tons
	NO_x	Emissions of nitrogen oxides	tons
	SO_x	Emissions of sulfur oxides	tons
	CO	Emissions of carbon monoxide	tons
	NMVOC	Emissions of non-methane volatile organic compounds	tons
	NH₃	Emissions of ammonia	tons

At a high aggregated level, this paper involves adding detail to the electricity generation and supply sector of a 35-sector model of the Turkish economy to allow for more detailed economic and environmental analysis of the electricity industry. To do this, in Figure 2, we disaggregate sector entry 17 (“Electricity, Gas and Water Supply”), electricity production, gas and water distribution and supply in the national economic input–output table (35 by 35 sectors) of Turkey into four sectors: electricity generation, electricity transmission and distribution, gas distribution, and water supply. The electricity generation sector is further disaggregated into six sectors as coal-fired, gas-fired, oil-fired, hydro, wind, and other power generations. In addition to disaggregation of the electricity sector, sector entry 2 “Mining and Quarrying” of national economic input–output table (35 by 35 sectors) of Turkey is disaggregated into three sectors as coal mining, coal importing, and oil–gas mining in order to apply policy shock designed as increasing indigenous production of coal. After disaggregation of these sectors (entry 17 and 2 in 35 × 35 sectors of WIOT) we use 45 × 45 sectors of Turkish economy in this analysis.

Figure 2.

Disaggregating sector entry 17 (Electricity, Gas and Water Supply) in 35 × 35 IO table of Turkey.

Results and discussion

The results of analysis are presented in the following three subsections based on impacts of more indigenous coal use on economic and environmental indicators. Increasing indigenous production of coal has two interrelated impacts: industry output growth impact and thereby energy impact that induce a change in GHG mainly carbon emission and air pollution level as well.

Based on the input–output table’s framework, many sectors have economic linkages with the coal mining and coal-fired electricity generation sectors, and they cannot be presented specifically for all. Under this consideration, the economic and environmental results presented from Tables 4 to 6 are only shown for the 20 top sectors which totally account for more than 90% of the economic and environmental impacts.

Table 4.

Change in output for $1 million demand for investment of coal.

Sectors	Output ($)
Coal Mining	1,036,060
Coal-Fired Electricity Generation	49,161
Coke, Refined Petroleum	28,019
Retail Trade, Except of Motor Vehicles	25,864
Inland Transport	25,148
Wholesale Trade and Commission Trade	19,486
Financial Intermediation	15,752
Chemicals and Chemical Products	15,247
Sale, Maintenance and Repair of Motor Vehicles	14,285
Textiles and Textile Products	10,853
Machinery, nec.	10,627
Rubber and Plastics	8062
Basic Metals and Fabricated Metal	8037
Agriculture, Hunting, Forestry and Fishing	7885
Other Supporting and Auxiliary Transport Activities	7378
Other Non-Metallic Mineral	7106
Water Transport	4197
Food, Beverages and Tobacco	3994
Pulp, Paper, Printing and Publishing	3809
Gas Fired Electricity Generation	3305
All other sectors	84,971
Total	1,389,245

Economic impacts

Table 4 indicates the direct and indirect economic contributions of the largest 20 sector (suppliers), within the supply chain of increasing production of coal. According to figures of this table, the $1 million increase in final demand for mining of coal produces the increase in economic output for all sectors of $1,389,241. The largest output occurs in the coal mining sector itself by the amount of $1,036,060. The additional $36,060 of production indicates that coal is used in the production of coal mining itself or by other sectors within supply chain. Note that the change in Gross Domestic Product (GDP) as a result would be only $1 million, since GDP measures only changes in final output, and not all purchases of intermediate goods.

The second largest activity occurs in “Coal-fired Electricity Generation” sector by amount of $49,161 since “Coal Mining” sector is the direct suppliers to this sector. It is also a direct supplier to the “Coke and Refined Petroleum” sector. Following top sectors such as “Retail Trade, Except of Motor Vehicles”, “Inland Transport”, “Wholesale Trade and Commission Trade”, and “Financial Intermediation” sectors are the services sectors of the Turkish economy. These sectors are followed by other manufacturing sectors such as “Chemicals and Chemical Products”, “Textile and Textile Products”, “Machinery, nec.”, “Rubber and Plastics”, and “Basic Metals and Fabricated Metal”.

Other main indicators of economic impacts including the value-added, taxes less subsides on products, trade deficit, and total hours worked by employees supply chain requirement for this analysis are shown in Table 5, sorted by value-added. It is estimated that a total of $946,881 value-added and $63,121 taxes for government income and 39,765 TL trade deficit and 19,487 total hours worked by employees are produced throughout the supply chain for a $1 million demand in investment of coal mining.

Table 5.

Change in economic indicators of sectors due to $1 million increase in demand for investment of coal.

Sectors	Value- added ($)	Tax ($)	Trade deficit (TL)	Employment (hours)
Coal Mining	778,520	43,644	–	12,975
Coal-Fired Electricity Generation	26,756	6202	(49)	868
Retail Trade, Except of Motor Vehicles	19,101	369	–	742
Inland Transport	13,519	1736	2377	151
Wholesale Trade and Commission Trade	11,806	438	1302	778
Financial Intermediation	9799	301	(170)	187
Renting of M&Eq and Other Business	9482	232	(356)	164
Real Estate Activities	8614	89	–	108
Sale, Maintenance and Repair of Motor Veh.	7982	403	714	477
Agriculture, Hunting, Forestry and Fishing	4960	289	(201)	85
Oil and Gas Mining	4845	379	(19,014)	72
Chemicals and Chemical Products	4228	544	(13,350)	123
Machinery, nec.	3933	219	809	322
Coke, Refined Petroleum and Nuclear Fuel	3516	4077	(16,150)	31
Other Supporting and Auxiliary Transport	3370	201	56	79
Gas Distribution	3190	249	(7)	249
Post and Telecommunications	2909	108	47	76
Textiles and Textile Products	2860	385	2678	218
Other Non-Metallic Mineral	2544	266	515	186
Water Transport	2382	224	1561	56
All other sectors	22,563	2766	(529)	1541
Total	946,881	63,121	(39,765)	19,487

Value-added is the income for both labor and capital and it is considered as a main economic indicator since it contributes to the social welfare of households and represents the compensation of employees and owner of capital including wages and rents (Wiedmann et al., 2009). The value-added generated by each industrial sector is in line with the output of sector. Therefore, relying on analysis findings, the “Coal Mining” and “Coal-Fired Electricity Generation” sectors have the highest value of value-added compared with other manufacture sectors. Among the top suppliers, service sectors including “Retail Trade”, “Wholesale Trade”, “Financial Intermediation”, “Renting of Machinery and Equipment and Other Business”, and “Inland Transport” provide the highest contributions to total income generated by sectors.

Taxes less subsidies on products are taken in this analysis as a positive economic indicator, because taxes are the major sources of the government revenues and these revenue are used for financing of public expenditure including public health, education, transportation, and various infrastructures (Foran et al., 2005). Taxes generated by each sector are given in third column of Table 5. The sectors that have the highest government tax revenues are linked to the “Coal-Fired Electricity Generation”, “Coke, Refined Petroleum”, and “Inland Transport” sectors. A closer look at the tax revenues generated by each sectors, “Coke, Refined Petroleum” and “Inland Transport”, represents the sectors with the highest total tax generation due to the high special consumption tax.

As for employment effects, an increase in final demand for $1 million in the coal mining sector creates 12,975 hours worked by employees. In total, this change in demand generates 19,487 hours worked by employees. The economic sector that indirectly benefits the most as a result of such an increase in demand are the “Coal-Fired Electricity Generation” with an indirect impact of 868 hours followed by the “Wholesale Trade and Commission Trade” sector with 778 hours and “Retail Trade, Except of Motor Vehicles” sector with 742 hours for indirect jobs. The complete distribution of hours worked by employees is presented in Table 5.

The trade deficit analysis results show that “Oil and Gas mining”, “Coke, Refined Petroleum”, and “Chemical and Chemical Products” have the largest trade deficit rather than other manufacturing sectors due to the higher import multiplier in comparison with these sectors. “Oil and Gas Mining” sector is responsible for nearly half of total trade deficit. Although the increase in demand for investment in coal mining gives rise to an increase in output and employment of energy intensive manufacturing sectors, it can be argued that the changing structure of the economic growth mainly relies on imports of energy resources. Reliance on imports of energy resources leads to an increased trade deficit that adversely affects the sustainability of economic development. In response, policy makers have decided to use domestic coal resources instead.

“Textiles and Textile Products” sector has the largest trade deficit improvement and this sector is followed by “Inland Transport”, “Water Transport”, and “Wholesale Trade and Commission Trade”, respectively. These sectors also contribute the most to the economic growth rate of Turkish economy (Aşıcı, 2015).

Environmental impacts

This section seeks to explore whether the possible increase in production of coal will have any significant effect on GHG and air emission growth rate in Turkey’s economic sectors. It is well known that carbon emission and air pollution are closely related to coal consumption. Even though these emissions are associated with all emitting activities, including current production, capital formation, and household and government consumption, this paper only takes industry production into account in the context of policy scenario.

Coal mining and coal fueling of power station and industrial processes can cause major environmental damage. Coal plants are the Turkeys’ top source of carbon dioxide (CO₂) emissions, the primary cause of global warming. CO₂ emissions are at unacceptable levels especially for the Coal-Fired Electricity Generation sector. This type of electricity generation emits 1000 g CO₂ per kWh, while Gas Fired Electricity emits about 500–600 g.

Coal is responsible for numerous environmental hazards throughout the entire fuel cycle, from global warming, to burning, to mining, and to disposal of waste products. Burning the coal creates some of the most harmful effects. In addition to contributing to global warming with significant CO₂ emissions, coal plants also emit the following pollutants: sulfur dioxide which produces acid rain and nitrogen oxides which is a key contributor to ozone and respiratory illnesses.⁵

As a general indicator of environmental impact, GHGs (CO₂, methane, and nitrous oxide) and air emissions (nitrogen oxides, sulfur oxide, carbon monoxide, and non-methane volatile organic compounds) supply chain pollutants for this analysis are given in Table 6 sorted by CO₂ emission as descending. The results of policy scenario indicate that the $1 million increase in demand for investment in coal mining sector give rise to release CO₂ by amount of 185,082 kg in total. As expected, the largest CO₂ emission with 49,161 kg occur in Coal-Fired Electricity Generation sector. The Coal-Fired Electricity Generation sector is followed by the other major energy intensive manufacturing industry sectors such as “Coal Mining”, “Coke and Refined Petroleum”, “Other Non-Metallic Mineral”, and “Other Transport Activities”.

It is estimated that a total of 2,030 kg methane emission and it is said that coal mining is methane-intensive sector of supply chain. The main nitrous oxide emitters are industries such as “Agriculture, Forestry and Fishing “ and “Coal-Fired Electricity Generation” and all sectors emit 6 kg nitrous oxide.

The sectors “Coal-Fired Electricity Generation” and “Agriculture, Hunting, Forestry” are on the top of the list of nitrogen oxide and sulfur oxide emissions. The total of nitrogen oxides and sulfur oxides are 1,046 kg and 308 kg, respectively. As for carbon monoxide emission, “Coke and Refined Petroleum” sector has the largest amount of carbon monoxide emissions among the sectors and the amount of emission of carbon monoxide emissions from all sectors is 1,638 kg. “Coal Mining” and “Agriculture, Forestry and Fishing” sectors only have non-methane volatile organic compounds emissions. “Coke and Refined Petroleum”, “Coal Mining”, and “Agriculture, Forestry and Fishing” sectors are found to have the largest contributions to total ammonia emissions.

In line with the rules set by the Intergovernmental Panel on Climate Change, GHG emissions are expressed in terms of CO₂-equivalents (CO₂-e), which are calculated as a weighted sum of various gas emissions by using gas-specific global warming potentials of 1 (CO₂), 21 (CH₄), 310 (N₂O).⁶ Hence, according to the result of analysis, total CO₂-equivalents (kg CO₂-e) is calculated as;

185, 082 (1) + 2, 030 (21) + 6 (310) = 229, 572 kg {CO}_{2} - e

Discussion

In this section, we can discuss the results of analysis to evaluate coal-related activities as an industry. These are Coal Mining and Coal-Fired Electricity Generation sectors. We can conduct comparative analyses in which we give the same amount of exogenous shock (increase in final demand for investment). We use the positive shock amount of $1 million given to the indigenous coal mining sector to evaluate the response of Turkey’s economic sectors.

For the Coal Mining sector, $1 million increase in demand for investment has an indirect impact with $36,036. The economic sectors that benefit the most with regard to indirect revenues are the “Coal-Fired Electricity Generation” sector with $49,161 and the “Coke and Refined Petroleum” sector with $28,019. This indicates that these sectors depend on inputs from coal mining sector such as lignite and hard coal. The distribution of direct and indirect revenues is presented in Table 7.

Table 6.

Change in the amount of environmental indicators of sectors due to $1 million increase in demand for investment in coal mining.

Sectors	Greenhouse gases			Air pollutant
	CO₂	CH₄	N₂O	NO_x	SO_x	CO	NMVOC	NH₃
Coal-Fired Electricity Gen.	79,705	1.6	1.6	721.3	131.8	42.7	0.0	14.6
Coal Mining	46,623	1919.7	0.7	82.9	35.2	161.0	10.8	109.1
Coke, Refined Petroleum	15,104	0.4	0.0	17.4	26.1	1254.4	0.0	874.2
Other Non-Metallic Mineral	14,719	0.4	0.0	16.9	7.4	19.7	0.2	13.4
Other Transport Activities	8805	0.1	0.0	0.6	0.2	1.5	0.0	1.0
Sale, Maintenance and Repair	2680	0.3	0.0	2.1	0.7	5.1	0.0	3.5
Chemicals and Chemical Prod.	2320	1.4	0.0	4.9	4.8	7.8	0.3	26.3
Basic Metals and Fab. Metal	2157	0.4	0.1	4.2	3.6	31.1	0.0	8.9
Rubber and Plastics	1886	0.3	0.0	6.0	2.1	14.5	0.0	9.8
Agriculture, Forestry and Fish.	1690	78.3	3.0	78.7	83.1	13.4	20.4	48.1
Gas Fired Electricity Gen.	1531	0.0	0.0	36.4	5.3	2.9	0.0	1.0
Inland Transport	1337	0.1	0.1	27.9	0.5	31.1	0.0	6.1
Retail Trade	1302	0.1	0.0	2.9	1.0	7.0	0.0	4.7
Wholesale Trade	1033	0.1	0.0	2.2	0.8	5.4	0.0	3.6
Financial Intermediation	574	0.1	0.0	0.6	0.2	1.3	0.0	0.9
Textiles and Textile Products	507	0.1	0.0	1.7	0.6	4.0	0.0	2.7
Food, Beverages and Tobacco	477	0.0	0.0	1.0	0.3	1.0	0.0	3.5
Water Transport	354	0.1	0.1	26.5	1.3	6.7	0.0	2.8
Machinery, nec.	269	0.1	0.1	0.9	0.3	2.3	0.0	1.5
Pulp, Paper, Printing	232	0.0	0.0	0.8	0.3	1.3	0.0	1.0
All other sectors	1777	26	1	10	2	24	0	18
Total	185,082	2,030	6	1046	308	1638	32	1155

Table 7.

Direct and indirect impact of $1 million investment in coal mining sector.

Economic sectors	Direct effect ($)	Indirect effect ($)	Total effect ($)
Indigenous Coal Mining	1,000,000	36,060	1,036,060
Coal-fired Electricity Generation		49,161	49,161
Other sectors		276,005	276,005
Total direct and indirect impacts	1,000,000	389,246	1,389,246

We can discuss a number of economic and environmental indicators of coal-related sectors by using graphical method. Spider diagram approach is used in this analysis as graphical method. The “spider” diagram (Figures 3 and 4) is a diagram where all indicators are presented on a log scale.

Figure 3.

Spider diagram for coal mining sector.

Figure 4.

Spider diagram for coal-fired electricity generation sector.

The Coal Mining and Coal-Fired Electricity Generation sectors portray a number of expected issues such as high output and value-added associated high CO₂ emissions as shown in Figures 3 and 4. It also shows bad outcomes for the environmental indicators of GHGs but good outcomes for the economic indicators of employment generation and tax income.

Conclusion and policy recommendation

It is certain that extending the traditional input–output analysis by combining economic and environmental indicators in physical and monetary units has provided a consistent tool for analyzing energy, economy, and environment interactions at sectoral levels. The analysis has proved to be adequate for the evaluation of greater coal use on economic and environmental indicators in prospective policy scenario. The findings indicate that the $1 million increase in final demand for investment for indigenous coal produces an increase in economic output for all sectors of $1,389,241 and the increase in total GHGs 229,572 of CO₂-equivalents (kg CO₂-e), 1354 kg of nitrogen and sulfur oxide, and 1608 kg of carbon monoxide as well.

The results of this research show the complexity of making decisions in the electricity generation sector, where there are multiple sustainability criteria for each and different preferences. Comparing the electricity generation technologies, domestic coal (lignite) power is the highest economic sustainability for three (value-added, employment, tax income) of the four economic impacts but it is the least environmentally sustainability for four (CO₂, N₂O, NO_x and SO_x) of the eight environmental indicators. The results also show that in such cases often the “best” solution is not available and that trade-off is necessary to determine the “most sustainable” option.

Based on the results from this study, the following policy recommendations can be made to improve the sustainability of the electricity sector in Turkey. Turkey has an important potential for a variety of renewable energy sources such as solar, wind, geothermal, bioenergy, and hydropower. The use of renewable electricity sources as an alternative to fossil fuels is of great importance for Turkey to increase both supply security and reduce the environmental impact of the electricity sector. For this reason, the government should diversify its energy mix to include mainly solar-powered, offshore wind, as well as encouraging increased share of renewable energy in the mix of electricity production.

Although the results of this study demonstrate that lignite is the least sustainable option in the sustainability of electricity generation, the current government policy of the Turkish Government is to increase the production of electricity from lignite to increase electricity supply. The only exception is that if the main energy driver is energy security, the sustainability performance of existing lignite plants should be improved.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

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Effects of increasing indigenous coal share in Turkey’s electricity generation mix on key economic and environmental indicators: An extended input–output analysis

Abstract

Keywords

Introduction

Methodology, data, and policy scenario

Economic input–output analysis

Data and policy scenario

Results and discussion

Economic impacts

Environmental impacts

Discussion

Conclusion and policy recommendation

Footnotes

Declaration of conflicting interests

Funding

Notes

References