Greg Mankiw criticises David Friedman who is worried about what politicians will do with the gigantic tax revenues that come out of a carbon tax.
I think there is a way out which can satisfy all parties: this is Martin Feldstein's idea of having tradeable carbon vouchers. In brief, the idea is that the government should only setup an enforcement machinery, and every citizen should get a voucher entitling X amount of carbon emissions a year. After that, the rich will buy vouchers from the poor, thus achieving a new distribution of the emission rights, in a way that avoids having this money flow into the exchequer [link, link]. This is the ideal solution for the carbon problem: a target level of emission is achieved, using the most efficient solution in terms of modified technology and consumption, while avoiding the political economy problems of a large tax/GDP ratio.