Exactly. Put the costs where they really are. I would make a bit of of a change, though--make the carbon tax refundable. Lets say you tax CO2 emissions at $1

Exactly. Put the costs where they really are. I would make a bit of of a change, though--make the carbon tax refundable. Lets say you tax CO2 emissions at $100/ton. You then pay $100/ton to anybody who effectively sequesters CO2. In fact, I would pretty much scrap the emissions rules and replace them with taxes of this sort. There should be no acceptable level followed by fines, there should be a cost from the first gram.