A PAM4 based direct detection system has been standardized for short-distance data center interconnects because of its simple architecture. Performance of the PAM4 systems is limited for high dispersion values or demands complicated signal processing for further increase in data rates. A polarization multiplexed carrier based self-homodyne (PMC-SH) link with adaptive polarization control is a practical approach with an laser oscillator (LO)-less and carrier phase recovery (CPR)-free coherent receiver that can replace PAM4 links for achieving high data rates. We analytically find that PMC-SH scheme results in a significantly better BER for a given transmission rate or can achieve doubling of the data rate for given bandwidth of electronics and laser power (when compared with PAM4). Practical implementation of the proposed system with adaptive polarization control is also discussed. Presented theoretical frame work highlights the advantages of such self-homodyne systems over PAM4 based systems in terms of SNR requirements and capacity.