Well, lower taxes on poor people.  Increase welfare, subsidize public transportation and other things that help transfer money to people who are hurt by the tax.<p>&quot;Figure out the best way to produce energy&quot; is not something we can figure out posting on HN, or even in a presidential debate. It is a complex and very uncertain question, but since it is a question of innovation, it is the kind of question that markets are very good at answering. A carbon tax directs the market toward finding out the solution efficiently.