One issue is the "spark gap" in prices, which occurs when taxes and policies are misaligned. It's purely a policy thing but you can end up in silly situations

One issue is the "spark gap" in prices, which occurs when taxes and policies are misaligned. It's purely a policy thing but you can end up in silly situations where heat pumps and EVs, which directly replace fossil fuels are getting taxed as if every unit of electricity they use was increasing carbon. Ramping carbon prices and returning the money to people so they have a financial incentive to do the right thing is the pure solution, but subsidies achieve similar effects, and seem to be politically easier. Some detail on the UK spark gap: https://www.linkedin.com/pulse/price-cap-spark-gap-richard-warren https://www.linkedin.com/pulse/price-cap-spark-gap-richard-w...