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

if you have a limited pot of money (say $100) and you can only spend it on two items (bread and alcohol) and the price of alcohol is increased by a special “don’t drink too much tax”, the theory says that a rational consumer will likely be spending less on alcohol.