The idea here is that instead of just taxing energy items by the gallon or the kilowatt, you shift it to how much carbon it generates. Gas and oil becomes more expensive than solar and nuclear.
It's an interesting idea, and it takes into account the total cost of the production of these items (aka - on the environment and pollution), rather than just the cost shipping and extracting them. It's the equivalent of going after a chemical company that dumps stuff in the local water - since they have to pay for the cost of cleaning up their mess, they're more likely to take care in how much they pollute.
Source: New York Times.