Gas fireplaces are noted for their clean-burning characteristics. Compared with wood fireplaces, natural gas and propane fireplaces produce much less carbon monoxide and particulate emissions.
However, no energy source is completely environmentally friendly. Natural gas and propane do release some pollutants when burned, primarily nitrogen oxides (which contribute to ground-level ozone, or smog) and carbon dioxide (a greenhouse gas). They also release significant amounts of moisture into the air. A poorly adjusted gas fireplace can generate incomplete combustion products, including carbon monoxide.
As with other energy-using appliances, it is important to keep in mind that buying an energy-efficient gas fireplace and using it wisely will use less energy and reduce greenhouse gas emissions that contribute to climate change.
Source: Natural Resources Canada (NRCan) - Office of Energy Efficiency