China's economy has developed rapidly in the last two decades, leading to an increase in energy consumption and consequently emissions from energy generation. China is the largest coal producer and consumer in the world (Finkelman 1995). It has been estimated that more than 75% of the energy production in China is based on coal (Chen et al. 2004), and more than 400 million people in China rely on coal for their domestic energy needs, such as heating and daily cooking. Due to the limited petroleum and natural gas reserves and significant coal reserves (1 trillion t) in China, it is likely that this coal-based, relatively cheap energy structure will continue for the foreseeable future (Ni 2000; Xu et al. 2000; Zhong and Wang 2000).