Path to a Pigouvian Tax?

Congressional Republicans are in the midst of trying to enact major tax reform, a staple of President Trump and Treasury Secretary Mnuchin’s economic plan. This could tie into the class in a wide variety of ways, including whether taxes on the wealthy (the ones this overhaul would target) are simply effective means of providing insurance against poverty, or providing redistribution as a sort of public good which would be inefficient to do privately. However, it is one of the Democratic Party's responses to this tax reform that immediately struck me as tied into what we were learning in class. 

2 Democratic Senators view this as an opportunity to pass a Carbon Tax, a Pigouvian tax that many climate advocates have long believed will help solve overpollution by internalizing the externalities in emitting carbon (a prominent greenhouse gas). By adding a tax equal to the marginal damage of pollution (the damage not accounted for by Private Marginal cost), which they calculate at $49 per metric ton, they can raise private marginal cost to private social cost. This would mean there are no negative production externalities, as producers bare the entire social cost, and would then produce where social marginal benefit (no difference from private) equals social marginal cost, the efficient level of pollution. While other measures, such as tradable permits or the Coase theorem were discussed in class, these are difficult to implement because of concerns over how to determine optimal quantity without markets and how to distribute permits, and free rider and negotiation cost problems, respectively. The primary obstacle to a carbon tax has always been political feasibility, and if Democrats can use the tax reform to make it a political reality, it would mark a significant step in removing a major market failure.