Comment by kurthr

Well, you don't need to tax the ethanol from corn or methane from waste dumps or wood pellets, or ammonia itself. You would tax the oil/gas/coal that came out of the ground that was used to fertilize the corn, process the corn, transport the corn, and distill the ethanol (otherwise it's double taxation). You don't need to tax the wood pellets or the stove they're burned in, or the electricity, just the carbon that is burned to make and transport them. So this is largely irrelevant.

A better question would be for imported items and services. How do you prevent tax shifting from carbon emission havens, which is no different from financial tax havens now. You tax them at entry using the most beautiful word, "tariffs". If an importing country doesn't tax carbon or carbon tariff their imports then you tariff them. Interestingly, it would then be a higher tariff for air transport than shipping. Where it actually get complicated is services, which people really don't like taxing. But if I run a LLM datacenter on coal in china or make bitcoin burning middle east oil, or consult on green projects on Indonesian gas those should be tariffed as well, and that's more difficult.