Abstract: Energy conservation and emissions reduction policy have made some achievements, at the same time there are still some problem such as too much administrative command, lack of market mechanism and the lack of price mechanism. The government is both energy conservation leader, supervisor also rule makers. In order to formulate energy conservation policy, they must have overall cognition on energy conservation and emissions reduction. The dynamic relationship between the government, enterprise and environment was analyzed setting up simulation model for key energy-consuming enterprises based on system dynamics. Through the simulation, the influence of different policies for energy conservation and emissions reduction effect could be studied, providing certain reference basis for the government decisions.

Key words: system dynamics, energy saving and emission reduction, policy simulation, energy consumption enterprises