<p>This study examines how environmental tax revenue allocation affects the optimal tax rate and pollution control using a computable general equilibrium (CGE) model with an environmental tax module. Four scenarios are simulated. Using all revenue for the government general budget (S1) reducing the optimal pollution level by 0.21% and increases the optimal tax rate by 2.94%, due to weakened abatement incentives. Using revenue for technology subsidies (S2) increases the optimal pollution level by 0.68% and lowers the optimal tax rate by 6.47%, reflecting efficiency improvement caused by technological incentives. Using revenue for transfer payments (S3) raises the optimal pollution level by 0.71% and reduces the tax rate by only 0.59%. This scenario promoting investment and economic growth, but provides weak emission reduction incentives. The policy mix scenario (S4), combining technology subsidies and transfer payments, increases the optimal pollution level by 0.47% and moderately reduces tax rates by 3.53%. S4 simultaneously achieves emissions reduction, technological progress, and economic growth. These findings highlight that the effectiveness of environmental tax largely depends on the revenue usage, and mixed tax use strategies can maximize economic efficiency and environmental improvement.</p>