PSE: even if the money were merely "consumed" by government on other things (principally health care and education here in Canada- those are the two single biggest government line items here), a tax on consumption would still do part of the job. Properly coupled to conservation programmes by means of a segregated fund, we'd be much further ahead because then government wouldn't be eyeing these funds for use in schools and hospitals (to which everything else will always lose- people's emotional hot-buttons are easily pushed).
Without a signal to people's pocketbooks, strong enough for them to notice, we'll continue in our addicted la-la land and CO2 and other combustion emissions are going nowhere but up.
Just using transportation as an example, considering the up-surge in stupid, wasteful consumption in the form of 8-cylinder cars, 2-tonne SUVs for city commuting, the death of the local railroads and the increased use of trucks etc. here in North America, obviously the price signal isn't strong enough yet for it to enter into people's decision-making process when purchasing vehicles, making shipping decisions etc. When the pricing signal is strong enough, fuel consumption may finally move into the top 10 of people's considerations when choosing a vehicle. Until it's the #1 or #2 consideration, the price needs to increase.