Abstract:ABSTRACT: In the power generation process, the thermal power enterprises produce electricity and emission, there is a corresponding relationship between the two physical, so they can participate in generation right trading and emission trading at the same time. To rationalize the relationship of causality and feedback among power generation, emission, tariff, emission cuts and enterprises profit, overall considering such factors as the electricity consumption, power generation, emission, free emission share, the price of generation right trading and the price of emission trading based on the system dynamics model the generation right trading and emission trading simulated. The results show that the price of generation right trading and the price of emission trading have an influence on generation substitution, and reducing free emission share of thermal power enterprises not only inhabiting the emission of the plants but also reducing the profits of plants. Besides, the implementation of generation right trading and emission trading will not have an impact on tariff. The changes of tariff is mainly affected by the price of coal.