I would imagine it's because that creates a perverse incentive, where the government has to encourage the bad activity in order to ensure it gets sufficient rev

I would imagine it's because that creates a perverse incentive, where the government has to encourage the bad activity in order to ensure it gets sufficient revenue. This isn't an argument against taxing pollution of course, but it is an argument against removing taxes on "productive behavior" in favor of taxes on bad behavior. Taxing pollution (or other bad behavior) should be done with the hope that this revenue falls to zero over time, and therefore it should exist primarily to discourage the behavior rather than to act as a significant revenue stream for the government.