This paper presents estimated external costs of electricity generation in China under different scenarios of long-term energy and environmental policies. Long-range Energy Alternatives Planning (LEAP) software is used to develop a simple model of electricity demand and to estimate gross electricity generation in China up to 2030 under these scenarios. Because external costs for unit of electricity from fossil fuel will vary in different government regulation periods, airborne pollutant external Costs of SO2, NOx, PM10, and CO2 from fired power plants are then estimated based on emission inventories and environmental cost for unit of pollutants, while external costs of non-fossil power generation are evaluated with external cost for unit of electricity. The developed model is run to study the impact of different energy efficiency and environmental abatement policy initiatives that would reduce total energy requirement and also reduce external costs of electricity generation. It is shown that external costs of electricity generation may reduce 24-55% with three energy policies scenarios and may further reduce by 20.9-26.7% with two environmental policies scenarios. The total reduction of external costs may reach 58.2%. (c) 2007 Elsevier Ltd. All rights reserved.