This study examines the dynamic influence of legal structure, geopolitical risk on carbon taxes in response to monetary and labor policies in Nordic countries and Canadian provinces. The study examines eight carbon taxes collected from Nordic nations and Canadian provinces from 1990 to 2023. The Local Projections Difference in Difference model augments the panel Ordinary Least Squares approach. The Nordic countries obtain approximately 0.13 % carbon reductions in passenger emissions while freight carbon emissions increase; in contrast, Canada achieves 0.04 % carbon reductions in passenger emissions while freight carbon emissions achieve 1.25 % of carbon reduction.This study also provides evidence that labor policy autonomy undermines the effectiveness of the carbon price. Overall, carbon tax revenue recycling under labor (monetary) policy impact resulted in a carbon decrease of around 0.34 and 0.24 percentage points. This finding reveals that nations experience significant reductions in carbon emissions when reinvesting carbon tax revenues, highlighting the importance of policy integration tailored to unique country contexts towards achieving climate action.