China accounts for 10 percent of global energy use and will continue to rely on coal for generating approximately 75 percent of its energy over coming decades. The environmental problems associated with coal burning are a concern for China as well as regionally and globally. The present paper summarizes China's energy structure and likely future energy requirements, while exploring the impact of energy use on air quality, black carbon emission, sulphur dioxide (SO2) emissions, and carbon dioxide emissions. Although China has begun to take action on local environmental problems from energy, there is still much to be done. In particular, the problem of black carbon and carbon dioxide emissions needs to be addressed. The present paper proposes addressing carbon dioxide emissions through a longer-term strategy that acknowledges the need for China to continue to grow without a short-term carbon constraint but with clear pricing of the short-term and long-term cost of carbon dioxide.