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*This has since been repealed, a decision I strongly disagree with.
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 we tried a scheme with very low economic impact (despite scaremongering to the contrary) carbon tax, which provably reduced emissions before its repeal.
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."
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