This paper constructs a multi-sector dynamic general equilibrium model with heterogeneous energy production firms and fossil fuel asset accumulation and discusses the impact of different emission reduction policies on carbon emissions, stranded assets, social welfare, and energy companies’ behavior. Mechanically, emission reduction policies will lead to a decline in the value of fossil fuel reserve of energy firms, causing the burst of "carbon bubble" and the gradual stranding of fossil fuel assets, affecting the financing and production of the energy sector, and ultimately causing a decline in total output and total consumption. Based on parameter calibration using data from China and the United States, we simulated the macro impacts of taxation, adjustment of financing constraints, and implementation of environmental industrial policies, and characterized the emission reduction paths and the scale of stranded assets corresponding to different policies.