A carbon tax that replaces income tax, dollar for dollar, is almost a pure win. To the extent that carbon use is absolutely necessary (read: inelastic), the ta

A carbon tax that replaces income tax, dollar for dollar, is almost a pure win. To the extent that carbon use is absolutely necessary (read: inelastic), the tax will be passed on transparently. It'd be theoretically efficient in the same sense a land tax is efficient. To the extent that carbon use isn't necessary (read: elastic), it'd drive people to substitute it for something else. Even efficiency of implementation is trivial compared to income tax. The government knows where companies are extracting fossil fuels, and it knows which companies are extracting fossil fuels, and fossil fuel extraction requires large amounts of hard-to-move capital. Policy-wise it's as pure an economic win as we can imagine in this world of ours, as we'd be moving away from distortionary income taxation.