In Canada, the carbon tax revenue is given back as a rebate which results in a net tax decrease for most families. In the US there have been proposals to use the revenue to cut payroll taxes, I believe Harvard economist (and notably former republican) Greg Mankiw has been pushing this idea for years now.

Where the tax revenue goes isn't the biggest deal since getting a price on carbon alone will result in shifting incentives towards lower carbon behaviors and investments. In my experience watching debates about Carbon Taxes where I live, generally speaking, when people complain about where the money is going they are not arguing in good faith and trying to just spread FUD about the policy to prevent a carbon tax.

Thanks for the first part of your response. Those uses seem potentially interesting.

The second part of your response is somewhat frustrating though. It absolutely does matter what the tax is used for. This can’t just be an excuse for the total tax that I pay to be increased with the additional funds being put towards things like war fighting in far off lands. That’s maybe not as much of a problem in Canada as it is in the U.S. It’s unreasonable to dismiss any concerns about how the tax revenue is used as FUD.

I personally would like to see it go to public universities to fund basic research in areas related to climate change.

Some of it should but since Carbon taxes could be regessive some type of rebate to people on the lower end of the income scale would be good also.