the government charges carbon emitters for their emissions - this is done in multiple ways, but the gist is big polluters (power generation, industrial, etc) are charged at the source and things like petrol is charged at the pump

as part of taxes, or whatever other means, the revenues from that tax is evenly distributed back to the population

this makes the cost of carbon-heavy products more expensive, making carbon neutral products cheaper relative to them

it also means that if you live a carbon neutral life, you’ll end up paying no tax, and just getting a nice payout to offset the slight extra you paid for eg green energy

carbon trading schemes are different

it’s all very elegant imo, but the language is bad (nobody likes new taxes) and the govt didn’t do a good job at marketing the chunk of cash they were giving everyone