We apply ab initio molecular dynamics (AIMD) to study the hydration structures of the carbon dioxide molecule and the bicarbonate and carbonate anions in liquid water. We also compute the free energy change associated with the nucleophilic attack of the hydroxide ion on carbon dioxide. CO2 behaves like a hydrophobic species and exhibits weak interactions with water molecules. The bicarbonate and carbonate ions are strongly hydrated and coordinate to an average of 6.9 and 8.7 water molecules, respectively. The energetics for the reaction in the gas phase are investigated using density functional theory and second-order Moller-Plesset perturbation theory (MP2) in conjunction with high-quality basis sets. Using umbrella sampling techniques, we compute the standard state, aqueous phase free energy difference associated with the reaction CO2 + OH- -> HCO3- after correcting AIMD energies with MP2 results. Our predictions are in good agreement with experiments. The hydration structures along the reaction coordinate, which give rise to a predicted 9.7 kcal/mol standard state free energy barrier, are further analyzed.