If I can make 1 unit of food for €50 and use 50 tons of carbon, or make it for €60 and use 10 tons of carbon, a carbon tax and food subsidy would allow me to sell that €60 low carbon food for €50 and force me to sell the high carbon food for €60
This gives an economic incentive to use the lower carbon method, funded by those who use more carbon, while not changing the end price or output.
This gives an economic incentive to use the lower carbon method, funded by those who use more carbon, while not changing the end price or output.