[robocat]

Many countries have high fuel taxes that approximate pricing in the negative externalities.

Assuming you think price as a signal is the solution to dealing with those externalities, it doesn't matter what caused the price to be high.

[titzer]

Fuel taxes are "in theory" the mechanism to price these in, but today, they are not, and how this money eventually has the opposite effect! Revenue from fuel taxes is usually funneled to more transportation infrastructure (> 80% to road construction in the US, only 15% to mass transit). The vast (and ironic!) indirect effect is more cars, more car miles, and more consumption--a long-term, indirect subsidy to fuel and auto industries. Approximately zero goes to regulation enforcement (like emissions inspections and other enforcement), which is funded by usage fees and general income taxes.

[robocat]

My underlying point is that money is fungible.

How you account for the tax dollars received doesn't affect the pricing signal.

We have accounting systems to colour tax dollars. However that doesn't mean you can define cause and effect like you are attempting to do. Although I've no idea what we should do.