Abstract: This paper constructs a CGE model of trade and environment policy to simulate and analyze the impacts of environmental tax, R&D subsidy and two policy coordination on China′s export industry structure, economic development and pollution emission. The simulation results show that a single collection of environmental taxes or R&D subsidies can optimize the export industry structure, but has its own disadvantages. If the two policies coordinate, they can achieve maximum pollution reduction while promoting economic growth, and the optimization of the export industry structure is higher than that of a single policy. Therefore, China should consider combining environmental taxes and R&D subsidy policy to optimize export industry structure, which can avoid the problem of environmental pollution as far as possible and promote sustainable economic development while developing foreign trade.

Key words: trade and environment policy, CGE model, pollution abatement, optimization of export industry structure