Carbon Taxes and the "Tax Interaction Effect"

"For years, many economists have advocated a tax on the emission of carbon dioxide and other greenhouse gases as a way to correct the negative externality of manmade climate change. More recently, even a growing number of conservative economists have embraced a carbon tax, not only as a way to correctly align market forces, but also as a way to offset other, more distortionary taxes. The slogan underlying such "carbon tax swap" proposals is that the government should "tax bads, not goods.""