It seems to me that these are the biggest advantages of a carbon tax system (as has probably already been pointed out):
- Increased incentive for individuals to reduce consumption based on higher cost of consuming carbon-footprint-heavy products/services
- Increased incentive for industry to reduce the amount of carbon emitted to produce products/services, thereby giving themselves a competitive advantage over other competitors*
- Putting a price on environmental resources, finally
*This is, in my opinion, going to be one of the best outcomes. If company A invests in technology to reduce the carbon footprint of producing a product, and company B does not, then company A gains a competitive advantage over company B. It has a reduced tax burden, which it can then pass on to consumers in the form of cheaper goods. Initially, this saving will be absorbed by the cost in investing in the technology, but over time the gain will begin to give company A an advantage.
It gives incentive for companies to innovate to become more focused on sustainable methods of producing goods and services.
There is a famous paper by
Christopher Stone called "Should Trees Have Standing?" that looks at the issue of pricing the environment, it is definitely worth a read, and at least a mention here.
One of the biggest issues with our global economy is the unbalanced distribution of natural resources that aren't valued properly (or sometimes, valued at all).
A carbon tax is step one to putting a price on the environment. Despite its flaws, it's a great concept. The biggest issue will be how it is implemented, and whether or not the additional tax collected is reallocated in a meaningful way.