Global warming and other adverse climate change impacts induced by anthropogenic carbon dioxide emissions is a major public policy concern around the world. This paper examines the impacts of market-based economic reforms on per capita CO2 emissions in the European and Central Asian transition economies where environmental degradation was pervasive prior reforms. A dynamic panel data model is employed for this purpose for 28 countries covering 22 years from 1990-2012. Our results suggest that reforms in competition policy and corporate governance are the significant driver of emissions reductions in the region. Therefore, advances in competition policy and governance reforms are desirable given the available scope to extend these reforms. The Kyoto Protocol had no significant effect in reducing emissions levels while the relationship between economic growth and emissions seems weak based on our results. The results indicate that reducing energy use by increasing energy efficiency and investments in renewable energy are necessary to reduce the carbon emissions level and mitigate the adverse impacts of climate change in the region.