This thesis is intended to analyse the policy effects of the simulated Chinese climate policies. Without considering any benefits and influential factors, the carbon tax could effectively reduce the carbon emissions at the price of the welfare loss. Considering its ancillary (health) benefit, the tax will induce less emission reduction and welfare loss. The primary (climate) benefit of the tax will increase the carbon emissions, decrease the carbon intensity, and induce an economic boom. The induced technological change (ITC) of the carbon tax will have negative impacts on the carbon emissions, and it will increase the real GDP (RGDP) but decrease the household welfare. The inequality impacts of the carbon tax depend on the distribution of the climate damages and the payments of the abatement costs. Recycling the tax revenues will also affect the inequality impacts of the tax. Under the impacts of the projected urbanisation, the carbon tax will induce more emission reduction, less RGDP loss, and more household welfare loss. With the same amount of the targeted emission reduction as the carbon tax, the emission trading scheme (ETS) policy will induce the higher household welfare compared to the carbon tax.