This chapter uses input/output analyses to investigate impacts of implementing an agricultural carbon tax and subsidy rationalization in Malaysia. The study takes a RM145/ton carbon tax as its basis to quantify effects across diverse agricultural segments, income groups, and socio-economic strata of price and production ramifications of such a tax. Findings show the potential of adopting a carbon tax and removing agricultural subsidies to effectively mitigate Malaysia’s agricultural GHGs while simultaneously reducing energy and food consumption, particularly in crops, animal husbandry, and hunting. The study also spotlights economic losses and other adverse impacts on agriculture arising from adopting machinery and animal feed. Despite proportionally larger GHG reductions than the decrease in GDP resulting from carbon taxes or subsidy rationalization, the resulting regressive income loss that farmers and households incur exacerbates income inequality, showing a need for such policies to be meticulously designed, with careful attention to equitable distribution.