Australia has just instituted a Carbon tax of $24 per metric tonne of Carbon (not CO2 I believe). This is offset by a $10 a week in additional benefits or tax cuts to households. Since 20 pounds of CO2 are emitted by burning a gallon of gas, my conversions indicate that this is equivalent to about $0.60 per gallon of gas. So lets say you drive 10,000 miles a year and get the present US average of 25 mpg at $4 per gallon. You will use 400 gallons, at a cost of $1600. A $0.60 US carbon tax per gallon will cost you $240 more per year. If your car lasted 15 years (which is about the average lifetime of a car, though maybe with different owners) it would cost $3600 dollars for the carbon tax on it. This is about 10% of the cost of an expensive car, and 20% of the cost of a budget car. A mild, but not a decisive incentive.
However, if you upgraded to a 50 mpg gas saver car, it would reduce your yearly gas bill by half, from $1600 to $800. Over 15 years, the gas saver car would save its owner $12,000 without the carbon gas tax. With the carbon gas tax it would save an extra $1800. So the reduction in gas cost alone without the carbon tax looks like it would more than pay for the increased cost of a gas saver car. The added carbon gas tax savings would not be a decisive part of the economic savings.
