China Pakistan Economic Corridor (CPEC) is a mega project of worth U.S$46 billion, out of which U.S$34 billion are marked for energy projects. Concerns have been raised about the effect of carbon emissions associated with these coal-fired projects and their impacts on climate and the economy of Pakistan. This study provides carbon emissions estimates to understand the environmental viability of these projects. .Our estimated results of carbon emissions show that as the percentage of carbon content increases in the amount of fuel used for power generation, the emissions from these power plants are also increased. It is also found that Sub-bituminous coal, which is imported from Indonesia and South Africa has a higher percentage of carbon content (71-77%) as compared to indigenous lignite reserves of coal (60-70%). Our estimated results for macroeconomic indicators have also shown a positive increase in Pakistan’s Economy due to investment in these coal projects for power production. The results after simulations show a positive change in real GDP of Pakistan due to an increase in energy output production. This increase in GDP will also increase our real exports and imports i.e., 0.12349% and 0.15026 % respectively .Therefore, indigenous lignite coal reserves in Thar District and Chamalung in Baluchistan should be used to run these power projects to minimize the environmental damages and overcome energy crisis of Pakistan which will improve the economy of Pakistan. Supervisor:- Dr Aneel Salman