This paper investigates the possibility of introducing mitigation policies for greenhouse gas emissions in isolated areas with limited availability of alternative energy sources. The Cypriot energy system has been considered as a reference case study and it is concluded that even for an isolated economy with very high rates of growth, enough options are available to reduce significantly greenhouse gas emissions and effectively contribute to sustainable environment. The conclusions of the study are based on analysis done with ENPEP, a hybrid model that employs a market-based simulation approach to project future energy supply/demand balances and the associated air emissions, as well as to evaluate alternative energy technologies. The study also shows that one of the best long-term strategies for reducing greenhouse gas emissions in Cyprus is the introduction of natural gas via a submerged gas pipeline to Syria. (C) 2003 Elsevier Science Ltd. All rights reserved.