The Australian Government circa 2010 introduced a carbon tax... it was one of the first governments in the world to do so. It causes prices to go up, miners to threaten to close mines as costs became too high, basically it was a shit show and the government went to election against a conservative party promising to remove the tax and make it impossible to bring it back, ever, if it won... of course, it won and has remained in power since then. Today, Australia is probably one of the worst offenders when it comes to carbon emissions per-capita, and its Government is hostile to carbon emission reductions except when it costs no jobs, no taxes and no worries to anyone , i.e. never.
I think we can see this scenario playing up again in quite a few other countries, unfortunately... for this reason, I don't think taxes will solve the problem.
When the carbon tax* was introduced in Australia our tax free threshold was increased from $6k to $18k which more than covered the increase in costs caused by the tax.
*This has since been repealed, a decision I strongly disagree with.
In Australia we had (for a brief moment) a carbon tax. It was mercilessly vilified by the Murdoch press who aided and abetted one of the darkest periods of Australian political life in decades, and resulted in the downfall of a government.
"The ill-fated Australian carbon tax lasted just two years. ... Emissions dropped almost immediately after it was introduced as businesses moved to technologies that emitted less. That price signal had an impact. When it was dumped in 2014, carbon emissions began to rise again almost immediately."
In Australia we tried a scheme with very low economic impact (despite scaremongering to the contrary) carbon tax, which provably reduced emissions before its repeal.
The previous federal government in Australia introduced something along these lines: a carbon tax designed to be revenue-neutral. Compensation for lower income earners was worked into the income tax system (some also went directly to certain highly-exposed export industries).
Unfortunately thanks to incompetence in how this plan was sold by the previous government and an aggressive campaign against it by the opposition, that government lost the following election and now we have the worst of all worlds: carbon tax repealed (the only country going backwards in this regard AFAIK), compensation retained (the incoming government being too spineless to scrap it, despite themselves declaring a budget emergency) and a new braindead "direct action" policy where we now give tax dollars to polluters to encourage them to tone it down (stupidly inefficient and another hit to the budget).
Australia tried something similar with a carbon tax a few years ago - not for fuel, but for carbon emissions generally. The policy was very well designed and ensured that lower income earners were compensated for any increase in costs to the extent that they had a net benefit, and in the short time it was operating, was successful at reducing emissions.
Unfortunately for us (and the world) this was too complicated for many Australians to understand and the political right exploited that to tell a scary story about a 'new tax', leading to their election and the removal of the scheme.
While economists (and rational thinkers) generally love carbon pricing schemes, they have been pretty unsuccessful politically because people are generally too stupid to understand them and cynical politicians in bed with the fossil fuel industry are happy to play to that.
In Australia, the debate was so popular that it continued after a carbon tax was successfully implemented, which resulted in the tax being repealed in 2014 and not much action on climate change since then. Maybe “debate” is not the right word for what happened, but engaging the public on climate policy seems to have had perverse effects in Australia. https://en.wikipedia.org/wiki/Carbon_pricing_in_Australia
We've got some form of carbon tax in Australia and people are up in arms about it. "How DARE they put my power bills up". "Why should we go first if no one else is doing it"? Everyone complains about global warming and wants something done, but not out of their own pocket. Any government instituting these kind of taxes will be booted out, and the opposition will come right along and repeal them.
Australia's short-lived carbon tax reduced emissions. Despite the overblown media claims at the time, it didn't impose a massive cost on consumers, nor hugely impact GDP.
Australia was a good experiment on this and the effects were dramatic, equally dramatic when it was repealed (yes a major piece of legislation was rolled back, which is another problem in itself) http://www.energy.unimelb.edu.au/documents/australia-repeale...
Measuring the effect of any tax is difficult, especially if it is hypothetical or only existed for 2 years, but Australia’s experience suggests that carbon taxes work (ie. they reduce carbon emissions). The biggest taxpayers were aluminium smelters, and the resources industry isn’t that mobile. https://en.wikipedia.org/wiki/Carbon_pricing_in_Australia
See Australian politics for clues on why that probably won't be an attractive option for politicians where you are. We implemented a carbon tax. While not perfect, it's a pretty decent stab IMO, yet is very easy to demonise and as such is wildly unpopular with hoi polloi.
It's a real pity that many good legislative ideas seem to be susceptible to simplistic populist attack if you yell loud enough.
When the carbon tax was introduced in Australia the tax free threshold was increased from $6000 to $18,000 and additional tax benefits were given to low income and welfare recipients. Anybody earning less than $80,000pa at the time were better off under the carbon tax, and anybody earning above that were in a position to make purchases to lower their impact.
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