How does the carbon tax reduce emissions?

Question

It seems to me it just makes people pay more tax and doesn’t actually help climate change. I researched the Canadian carbon tax btw

In: Other

Answer 1

Generally speaking, there are only so many carbon goods you can buy with $100. If the cost of those carbon goods goes up, then you can buy fewer of them. This means that fewer are produced which reduces the amount of carbon emitted. It’s not that there is less carbon emitted per item produced, but there are less items produced overall because each one is more expensive to produce due to the tax.