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Comment by TheRealPomax | Hacker News Reader

The problem is that people focus on the word "carbon" and then ignore what the word "tax" means: tax is collected into a single account. Where it came from is irrelevant, and what's done with it is in no way tied to where it came from, so if you want a carbon tax, you better damn well also have some system in place that forces X% of a munipal/state/provice/federal/whatever budget to first be formally declared as reserved for spending on this particular issue. Otherwise that carbon tax goes to basically everything before it goes to "augmenting cars".

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A carbon tax is a pigovian tax which works by disincentivising the undesired behaviour. It makes burning fossil fuels more expensive, thereby making everything else cheaper; in that sense you could also call it a "green subsidy".

What you do with that money is irrelevant. Turn it into a big paper boat and float it down the Hudson. The effect is in the levying of the tax, not in what is done with it.

See for example Canada, who directly deposits the revenue back to its residents.

The "augmenting cars" bit comes from people who don't want to pay the (now high) price of fossil fuels anymore, and instead want to avoid that tax by going green. That's how pigovian taxes work. See the UK who introduced a carbon tax, and promptly saw a huge shift in energy production to green energy and lower CO₂ emitting fuels.

You could also have a dollar-neutral carbon tax by lowering, say, income tax to exactly offset the revenue from the carbon tax. The population as a whole would not lose any money, but low-carbon behavior would be incentivised.

The point is not to augment cars via the proceeds of the tax, it's to change consumer or business behavior from the consumption of things that create otherwise uncaptured negative externalities like pollution or global warming - a market failure. As a side effect, these taxes are thought to create the economies of scale and investment necessary to make substitutes work in the market with minimization of consumption or economic output if the tax is introduced is scaled up with time.

This is why many well known economists are for a carbon tax:

https://clcouncil.org/economists-statement/

In the US we already have Medicare and SS taxes dedicated to that. Many other jurisdictions also have dedicated tax funds for various purposes established by law, e.g. a sales tax used solely for funding transit services, for example.

The point is to let the market decide where to allocate money for reducing CO2.

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