Abstract: This paper introduces CGE model to simulate different macroeconomic scenario according to the degree of economic transition. Taking the policies responding to climate change such as carbon tax policy,carbon trading into account,it systematically estimated the economic structure and the economic and social impact of these polices under different emission reduction targets. The results indicate that purely implement carbon emission reduction policies will induce the energy price multiplied,thus attenuate the utility of residents and have negative impact on economic development. The simulation results under different simulations show economic transition can promote low carbon development in China effectively. The cost of carbon emission reduction is much lower under economic transition scenario than the economic non-transition scenario.