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The imposition of a carbon emission tax would make it costlier for customers to use products that emit excessive amounts of carbon dioxide like automobiles.
This would reduce the demand for automobiles, especially those that emit a lot of pollutants. Customers would travel less or use methods like car pooling, etc to reduce the total carbon dioxide emitted by them.
They would also buy more products that can serve the same purposes as those that they have but which are more efficient and pollute less. This would increase the sale of smaller automobiles and those that use more efficient technologies like dual sources of fuel, electric cars, etc.
A carbon tax would affect customer choice and in turn force businesses to change the products they produce and opt for those that are in demand now.
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