This paper presents a power system capacity expansion planning model considering carbon emissions constraints. In addition to the traditional technical and economical issues usually considered in the planning process, two environmental policies that consist on the taxation and the annual limits of carbon dioxide (CO 2 ) emissions are considered. Furthermore, the gradual retirement of old inefficient generation plants has been included. The approach guarantees a cleaner electricity production in the expanded power system at a relatively low cost. The proposed model considers the transmission system and is applied to a 4-region and 11-region power systems over a 20-year planning horizon. Results show practical investment decisions in terms of sustainability and costs.