Abstract:The paper inspects the impact of emission tax and pollution control subsidy on the industry structure and environment protection under two different pollution control modes that are terminal pollution control and clean production The main conclusions include: 1) Increasing emission tax will help to reduce the total amount of emissions in short-term and long-term under terminal pollution control, but under cleaner production, the effects of same action are ambiguous 2) Subsidies for pollution control have vague impact on pollution control and the size of industry We can clearly predicate that increasing pollution control subsidy will reduce the short-term industrial emissions and encourage new entrants only in the terminal pollution control mode3) As long as the emission tax is equal to the marginal social welfare loss caused by pollution, the objective of maximizing the social welfare will implement automatically, subsidies for pollution control is not necessary