[lukifer]

I suspect there will be always be use cases for fossil fuels; for instance, even when 99% of all cars are electric, I wouldn't want to deny auto enthusiasts muscle cars and the like, if they're willing to pay for the societal externality. The carbon tax can continue to go up to cover these cases.

Moreover, I think the same model can apply to other negative externalities (aka, Pigovian Tax [0]). But to the extent that the public will someday complain that their carbon dividend is going down: (a) I call that a good problem to have, and (b) because the collective action problem now points the other direction, there's no individual incentive to over-consume such that the dividend goes up again.

[0] https://en.wikipedia.org/wiki/Pigovian_tax