The environmental impacts of energy use over last decade and environmental damages cost by coal exploitation and use, which is 185.6 Yuan/t coal, were analyzed. The four key challenges of China's energy development were pointed out, and environmental protection targets in sustainable energy development to improve the environmental quality and reduce greenhouse gas emissions were proposed. According to the main air pollutants emissions control targets, the possible constraints on coal consumption were discussed. Meanwhile, the strategic measures and policy recommendations to achieve green and low-carbon energy development were presented.