International policies to reduce carbon dioxide emissions may have major macroeconomic impacts, which EGEM, a macroeconomic/energy model, is designed to simulate. In this paper, an energy demand model is used to compare the impacts of carbon and energy taxes on CO 2 emissions in eight OECD countries. EGEM consists of an econometric model of en- ergy demand, integrated into an international macroeconomic model (GEM: Global Econometric Model). GEM has been developed and maintained jointly by the London Business School and the National Institute for Economic and Social Re- search (NIESR). Energy sector equations were esti- mated for total fossil fuel energy consumption, which is then divided into three shares for coal, gas and oil, as functions of energy prices, GDP, a time trend and other determinants. In each case cointegration tech-