I don't believe local food markets reduce the environmental burden of bringing food to our plate, although it may well be healthier and a good social outing. My back of the envelope calculations are that if there is less food to carry, the extra energy will be used bringing fertilizer for the local growers; extra fuel for the people who make a special trip to the food market etc. Infact, it really is impossible to tell whether it makes any difference, but it sure makes everybody feel better about it. Being pro-active doesn't require proof that it is making any difference. Contrast this to a simple carbon tax. Everyone gets punished or rewarded depending on how much they use/save. It is all proportional. Put the carbon tax high enough and the food markets will generate themselves if they really do reduce CO2 emmissions.
Does the carbon tax then give an overall burden on the economy? Not if there is no exemptions. The money that goes to the Government can be used for whatever purpose we feel necessary. If there are exemptions, the exempt will have more options and more incentive to consume carbon, and more of it available because the non-exempt are saving it for them.