> If the assertion ... actually addressing those externalities
No. We can address those externalities by creating low carbon buildings, energy, and other infrastructure. Those are mostly finite projects. Until we know how high carbon taxes must be to induce the required change, we might have far too little to fund even that, or much in excess. Just like it took many years (this time we need to go quicker) to understand the scale of the North Sea oil dividend. After some years we'll have converted much of that infrastructure and need more long term targets for that money. Being perfectly revenue neutral is NOT the aim. Dramatic and lasting behaviour change is.
It needs to avoid promoting extra spending that cancels out reductions achieved by the tax, and enough redistribution to compensate for the regressive nature of a big carbon tax on goods and services. We don't want people starving as a result. UBI seems it could fit nicely. Doing both seems in the best interest of the planet and UK. There may be better ways of achieving those two aims.
> It also runs into the problem that "sin taxes" have
Yet the UK has had no problem whatsoever, on both sides of the political divide, campaigning against smoking whilst having public health policies to promote quitting and increasing "sin" taxes way in excess of inflation yearly. Smoking rates have dropped to around 10%. Why can't this be exactly comparable and as successful? Sin taxes have quite definitely not had this problem for smoking. Smokers are an endangered species in the UK. A carbon tax seems perfectly analogous here, and ideally suitable for the European context.
> Norway's oil fund is built up on royalties .. It's not a tax on externalities
I am very well aware of that. I did not claim it was such a tax, and it doesn't matter in the least anyway. It was an example of a more intelligent use of a government windfall income.
Creating a long term fund to benefit the UK beats most of the alternatives, and certainly beats the Thatcherite model of pissing it away on tax cuts and consumer booms. Those are the very last things we need for this issue.