yeldub You said: The consumer gets money in the pocket and can keep buying the more expensive goods from the emitter who doesn't upgrade, or he/she can buy a cheaper alternative from an company who pays less carbon tax.
When it comes to power there will be no choice. And if you think clean energy will be a choice you are wrong because from all that I have seen clean energy sources cannot come anywhere near the low cost of coal.
Then you said: Then he/she gets to keep the money they have saved. This provides the incentive for the polluter to reduce emissions else they will be out of business eventually. (and production will go where it is cheaper, like China.)
The consumer will not get to keep the money because the carbon tax will spur INFLATION so costs on everything will go up. That should result in increased interest rates.
