Taxes fail AND can’t solve the net benefit---laundry list.

Notwithstanding the moderately positive conclusions on the potential of environmental taxation for enhancing transitions, we identify six barriers and limitations that should not be overlooked. First, public and political support for environmental taxation is limited. People dislike taxes in general (Avi-Yonah & Uhlmann, 2009), and environmental taxation in particular because they see it as an illegitimate sources of revenue for the government (Green Fiscal Commission, 2009a). One way of making environmental taxation and green tax reform more acceptable is using insights from behavioural economics. For example, to make people accept a budget-neutral tax reform, the value of what they receive should be higher than the value of what they sacrifice. This phenomenon is called the endowment effect (Kahneman et al., 1991). Second, an environmental tax in a socio-technical system such as the energy system will need to be implemented for a long period (more than ten years) before it starts living up to its potential, for both technology and practices. However, politically this is a long period, and the environmental tax reforms that survive the first political decision process, are often reversed when a new government takes office. This happened to the Australian carbon tax in 2013 (Carl & Fedor, 2016). A rare counterexample is the Swedish carbon tax, which has been in place since 1991 (Daugbjerg & Svendsen, 2003). Third, choices made for or against a certain technology or practice will influence policy options in the future (path dependencies) (Rotmans, 2003). Misalignment of a tax with the transition vision could result in a lock-in or even system breakdown (van der Brugge & Rotmans, 2007; Kemp & Pontoglio, 2011), although a subsidy poses a larger risk of a lock-in than a tax. Fourth, the lack of sufficient, appropriate or promising niches is a barrier, because niches that do not perform consistently will not provide any benefits (Sopha et al., 2013). Fifth, environmental taxes could have some undesired side effects, such as a negative competitiveness impact and a regressive impact. However, those deficiencies can be largely redressed by careful design and compensating measures as part of a green tax reform (Mikael Skou Andersen & Ekins, 2009; Klenert & Mattauch, 2016). Finally, sixth, a stand-alone policy instrument, taxation or other, will always have a number of downsides, part of which can be overcome by using smart instrument and policy mixes (Oikonomou et al., 2014), such as an environmental tax in combination with a large communication campaign explaining the benefits of the tax to citizens, and with revenue recycling, for example a subsidy, to increase public support.