Abstract:This paper supplements the literature about the effects of reducing carbon dioxide emission in an attempt to simulate the international GDP spillovers as a result of climate protection policy. A simulating system, which is intended to model domestic effects of mitigating carbon emissions as well as international effects represented by GDP spillovers, is constructed in this paper. The model system is based on three well-known models, State-contingent model, Demeter model, and Mundell-Fleming. The noticeable contribution of this paper lies in the integration of climate-economy model and the international GDP spillover model. Thus, it is possible to realize the analysis of international GDP spillovers caused by the anticipated climate protection actions from different countries. The United States and China, the two countries with the most carbon emissions in the present world, are taken as examples to implement the model. Six scenarios of countermeasure for global warming in two countries are set up to identify the effects of different actions. Whether or not to reduce carbon emission and also the different level of carbon reduction are included in these scenarios. The results show that the effects of American policy of reducing carbon emission on China′s GDP are more considerable than the effect of China′s policy on American GDP. These two effects both go through a process from the negative sign to the positive sign. The policy implication of the research is that the China′s GDP growth could take the advantage of American climate protection policy in the long term.