A major (if not main) argument for ‘pricing carbon’ was to ‘correct’ for the negative externalities considered to be caused by ‘carbon pollution’ (ie: carbon dioxide emissions).
The concept of negative (and positive) externalities has been long recognised by economists and in principle can be offset through a tax (for a negative externality) or subsidy (for a positive externality). Of course the key rider, often neglected, is that government intervention should only be considered where the benefits of that intervention outweight the costs of the intervention (in a present value sense taking account of all costs and benefits).
In the case of CO2 emissions, the costs (large) of the intervention are considerably higher than the benefits (close to zero).
However, there is one significant area of negative externalities that remains unexplored. That is organic farming. This is a negative externality because of the harm it causes to the world’s poor through less efficient production and the diversion of resources. Additionally it has led to outbreaks of disease (including malaria) because organic farmers eschew modern and safe pesticides.
Rather than a 0.5 percentage point increase to the medicare levy, a special organic farming tax (on production and/or consumption) should be imposed. I suspect this is more likely to produce a net benefit (in PV terms) than the carbon dioxide tax.