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Taxes are hard to implement in many countries, including the USA, because people have seen that the tax money is not spent on what proponents say it will be spent on.

You'd have a hard time getting a CO2 tax passed because it would just end up going into the general fund and get spent on pet projects, not on anything that really addressed CO2 emissions, or helped with the cost of alternative fuels or vehicles.



A carbon tax is a pigovian tax, which works purely to internalise negative externalities into the price of the good. Any purported bonus that could be achieved by directing that money, somehow, is just that: a bonus. It would still work without it.

A carbon tax would work if you burned the money. Bonus points if you captured the CO2 from the fire :)

A carbon tax serves to connect our intuition to our logic. We logically know that, somehow, the sum of all our disparate little actions is responsible for global warming. But the feedback loop is notoriously long, and complex. And humans are no-to-ri-ous-ly bad at properly valuing that. We couldn't do it to save our lives, or that of our species.

Furthermore, it helps break free from the tragedy of the commons, where every independent agent makes a game theoretically optimal move, to the detriment of the global system. No amount of proselytising or appealing to humane sensibilities, no amount of ecological lucidity or sudden flashes of intuitive insight into that awful feedback loop, would ever solve that problem.

No weapon works better against overfishing than quotas. Not necessarily a tax, but leveraging the market similarly.

No weapon works better against carbon emissions than a carbon tax.

Pigovian taxes are powerful weapons in a market oriented society. Very, very powerful. This is why vested interests will do absolutely anything to prevent them.

Doing something useful with the money is just a tiny cherry on top of large cake of success.


> A carbon tax would work if you burned the money.

This is very under appreciated. A lot of potential taxes aren't actually collected because people alter behavior to avoid them. For a carbon tax that's the point.

I'll also say the behavior you want to alter is not 'buying carbon based fuels'. The behavior you want to stop is people buying gasoline powered cars and natural gas fired furnaces. Which means what you want is a excise tax on those things not the fuel itself. Because when someone buys a gas powered car they commit then and there to emit 100 tons of CO2. So make the pain point then and there, not in the nebulous future.


Even more good could be done if the money were spent well, but the fact that the tax must be paid at all serves as the incentive that pushes behavior in a more environmentally friendly direction.


There are less regressive ways to incentivize change. Taking money from people hurts the people that rely on money more. Rather, investment and encouragement of particular industries is less punitive, but again goes back to valuable spending of public funds.


It would be great if someday those who want to "make a change" or "progress" society understood that succeeding at actually changing their neighbors' minds is more effective than succeeding at getting laws passed that confiscate their neighbors' wealth so that some government program may or may not end up being effective at getting to their end goal. The effort to defend political tribes is so high - imagine if it was used to help create a natural demand in various markets to achieve a given outcome.


That's the genius of a carbon tax that returns 100% of the collections as a citizen dividend, like the bipartisan bill recently introduced https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...




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