Study on the Policies of Influencing Carbon Emissions Considering China’s Urbanization

China’s urbanization plays an important role in the rapid growth of CO2 emissions. Based on ARDL co-integration test model, the paper focuses on the impact of policy on CO2 emissions with regard to China’s urbanization process. ARDL model is more stable and more suitable for small samples. CO2 emissions per capita is treated as the dependent variable, while independent variables include the urbanization rate, the second industry’s share of GDP, the ratio of urban fixed-asset investment in the total social fixed assets investment and policies. According to data collected over the period of 1978 to 2010, the result shows that China Energy Conservation Law issued in 1997 plays an important role in the CO2 emissions reductions. Meanwhile, the proportion of urban population growth is the most significant contributor to the CO2 emissions increase. Therefore, making policies about energy saving and emission reduction in consideration of urban population growth-for instance, providing the incentive for energy saving-is important in order to achieve the goal of China’s CO2 emission reduction.