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Recently, many coal-to-olefin (CTO) plants have started up in China. It is important for China to answer the following question: between coal-based ethylene and oil-based ethylene, which is the better choice? To provide a reference for policy makers and investors, this paper analyses the economic performance and the impact of future environment policy of both the CTO project and the oil-based ethylene project by a cost-benefit analysis. Quantitative analysis shows that the CTO project has a slight advantage over the oil-based ethylene project in a basic scenario when the crude oil price is above $70/bbl. However, international oil prices have a greater impact on the CTO project than the oil-based ethylene project. Thus, the CTO project has less anti-risk ability to the international oil market fluctuation than the oil-based ethylene project. What's more important is the environmental policy impact. After taking carbon trading costs and wastewater surcharge into account, the CTO project no longer has any advantage over the oil-based ethylene project. It can be seen in the foreseeable future that the CTO project will soon lose competitiveness. This indicates that the CTO project may not be consistent with sustainable development. These results suggest that from an environment perspective, policy makers and investors should be prudent about developing the CTO project. [ABSTRACT FROM AUTHOR]