It's not a simple trade off. That's the problem, it's multi-dimensional.

Diesel tends to be better at providing a satisfying driving experience with really high mileage. Better mileage means less CO2.

Diesel also tends to emit particulates and trace elements in the oil that it combusts. That means more smog, "acid rain," etc..

If you have to pick one axis, "acid rain" is out of vogue and CO2 isn't and diesel looks like a clear winner and you wonder why every car isn't one. If you pay attention to both axis then diesel starts to dramatically lose its advantage and you really have to use some exotic cleanup technologies just to keep it in the same league as gas engines.

I really don't know if there is big money involved, so much as just too simple a view of the problems. It's not like "clean coal" they both use effectively the same fuel that's just refined differently.