This paper evaluates the changes in efficiency and productivity of coal-fired electricity generation of 30 Chinese administrative regions from 1999 to 2007. We incorporate data envelopment analysis with the Malmquist index to study the progress made in this sector. Our model considers both economic and environmental factors by including the variables fuel consumption, labor, capital, sulfur dioxide emissions and electricity generated. A second model is constructed without the variable sulfur dioxide emissions to evaluate economic performances without taking environmental measures into consideration.