Companies that emit CO2-equivalent emissions now will either need to retool to lower emissions, or they need to buy emissions certificates from other companies that have retooled.
The end result is much simpler than introducing additional labeling of products for consumers to interpret. Instead, the externalities are removed and prices signal the total cost of production, as they should.
Option four: reduce need to drive around by bringing services closer to people and promoting remote working etc.
Option five: remove need to drive for shopping and such by creating "bus for stuff", you order things and get them delivered (near) home.
Option six: convert existing vehicles to electric (probably needs some form of battery innovation and might not be cheap even if price is offset by the raw metals salvaged from the engine).
Just a few examples of the obvious options. The truly clever smart options take more analysis (and a smarter mind than mine) to figure out.
The point: the search space for "reduce emissions (driving) because price of gas is insane" is very large, going full solar or poor don't drive are not really the only options.
If you don’t want it to hit poor people specifically you can subsidize the tax for them.
Imagine a collection of average households, not much different from one another. Each household could spend 10 thousand dollars improving insulation, and with the cap and div scheme it would be paid back in 5 years. After 5 years you are net ahead, so that seems reasonable, right?
Except that with the improvements the money they make back is now less, because the total amount of money that gets paid into the cap-and-div is less, so they have essentially lost money, even though the system is supposed to the revenue neutral.
Granted in the real world it would be more complicated because not every household is the same, but the system would still not give us a free lunch.
The UK had an escalating fuel tax in the late 90s, early 00s. At some point when petrol was around 99p a litre there were demonstrations and rolling go-slows on motorways. I think the demos may have also blockaded refineries. Stupidly, government caved and the escalator tax was neutered. Now fuel is around £1.30 a litre.
It was subtle at first, but by the time of the demos there was a noticeable effect on the roads. For the first time in living memory (mine anyway) they were getting quieter. Most people in my circle didn't seem that fussed by it, they just drove a bit less.
No idea if there was "someone" like an oil company was behind the initial idea of or organising of the demos.
This will force people to abandon extremely polluting habits out of economic necessity.
Maybe if a very left-wing Democratic party was the majority & the Republicans were in the minority this could work. Huge incentive for those that care enough about global pollution to make it more important than the economy. That seems to be the Democrats at this time. I'm not even sure if 100% of them would get behind it.
Since most of the Republican party doesn't take climate change as serious as their Democrats, they could get behind it by knowing the economy would suffer for a while & they could use it as political ammo.
Would be curious to hear if anyone thinks this could work politically, especially truly independent minds in-tuned to "both sides".