The next two sections of Part I explore key macroeconomic policies for enabling deep carbon reductions and offsetting some of the consequential social costs. Nevertheless, further research is required to better grasp the implications of such a full-scale and complex transformation of China’s economy. This research should focus on: detailed sectoral-level policies in areas with the highest mitigation potential; regulatory measures to ensure consumers can overcome market barriers and respond efficiently to price signals; and the measures necessary to avoid or offset potential negative social and economic distributive impacts.