It is necessary for Japan to support the development of desulfurization policies of China to solve global and local environmental problems. This study proposes a "double clean development mechanism" to reduce both CO2 and SO2 emissions at the same time. The purpose of this study is to investigate the consequences for both countries' energy economies of following double clean development mechanism between Japan and China. A dynamic optimization model is developed to estimate the effects of Japanese investments in China for carbon dioxide recovery-disposal and emission desulfurization technologies. The simulation results suggest that a double clean development mechanism can effectively mitigate the damage caused by SO2 emissions because the clean development mechanism itself can reduce SO2 emissions, e.g, by switching to fuels. However, China might not be willing to accept restrictions on SO2 emissions. This study also examines whether China will be able to maintain high growth rates with a clean development mechanism under the CO2 and SO2 restriction. The analysis shows that increasing the upper limit of investment from Japan to China can enhance the economies of the both nations. The effect of nuclear power installation on economic performance is also investigated for the both nations.