We modeled the effects of a carbon tax levy using Beijing's Inputs and Outputs table for 2010, disaggregating energy sectors as finely as possible to obtain robust simulation results and compiling a social accounting matrix. Then, we applied a computable general equilibrium model to investigate the impacts of a carbon tax on the Beijing economy and carbon emissions. The empirical results indicate that a moderate carbon tax would significantly reduce carbon emissions and be accompanied by a slight decrease in the rate of economic growth. Among fossil fuel initiatives, reduction of coal and petroleum consumption constitutes the greatest contribution to lowering carbon emissions. Levying a carbon tax would negatively influence fossil-energy-intensive industries, especially coal and petroleum, while positively influencing industries less dependent on fossil fuels,such as clean power and service. We conclude that Beijing should reduce consumption of coal and petroleum while striving to promote the use of clean fuel technology, which may be a crucial means to reduce carbon emissions. Levying a carbon tax would increase the price of production and, therefore, reduce final consumption, thereby producing a slight decrease in both GDP and social welfare. Despite the slight negative impacts on economic growth, negative impacts on gross production are expected to be larger. Therefore, a relatively high level of carbon tax is infeasible as policy.