What about the "side effect" of economic growth?
If company Y produces vehicles that emit CO2, and CO2-emitting vehicles are taxed, company Y will transition to electric vehicles which, for the sake of exposition, let's really believe don't produce CO2. But now company Y can contribute to economic growth, for example by selling trucks that can transport more goods at no "environmental cost", other than the environmental cost of the goods themselves (e.g., imagine the trucks are transporting coal, meat, or people), the cost of making and maintaining the roads, etc.
Generally, if GDP grows a factor of z in a certain time-period and CO2 emissions are reduced by a factor of w per unit of GDP in the same period, then as long as z / w > 1, CO2 emissions increase.
In my opinion, the best solution for Earth is to reduce GDP units while also trying to reduce CO2 emissions per GDP units. The best solution for people is to keep economic growth unchecked. Since the two things are incompatible, Earth and people should part ways.