He wants a working free market which requires companies to pay for all their costs. At the moment the oil and gas industry is massively externalizing costs that result from hydrocarbon output, if you stop that, for example with a tax that will drive up the production costs and in turn prices, those will reflect the actual costs.
This in turn will cause people to invest in things whose actual costs - especially over the long term in this case - are lower such as renewable or nuclear energy sources.
Obviously this is just economical theory, in practice the alternatives are not as advanced as we would like them to be and as innovation necessary doesn't happen instantly and will create delays in which people are forced to pay more overall to sustain their standard of living or they will have to reduce it.
In the short to medium turn this will be painful but I believe that this is the only way we will actually reach a useful solution.
I don't understand this point. So he wants to tax people, then give everybody the money taken back? Seems like a weasel response to me. Either you're willing to face the massive social fall-out from rigorous carbon taxes or you're not. You can't have your cake and eat it too with this one.