As long as you also increase taxes and have penalties in every country. Go to India, Hong Kong, Indonesia, China (The list could go on). The air is polluted with the stench of car exhaust pretty much every where you go. I even went to London a few months ago and got sick because of the pollution. When I would blow my nose at the end of the day, black nasty soot would be on the kleenix.
The US has done a lot to help out climate change and the environment. We have all kinds of EPA standards on our vehicles (that are actually followed), which have been in place for at least a decade or more. I can go to most major cities and not feel like I'm choking from the rancid air.
These taxes only end up strangling our economy because we follow the rules and other countries go un-checked because there is virtually no penalty.
"Carbon credits are a good market-based solution too, but it seems likely that people and industries will try to game the system."
Carbon credits are a joke. Huge companies pay for them and then just continue polluting. I thought the goal was to fix our environment, not make carbon credit companies wealthy. Money shouldn't give you a free pass to pollute.
Are we also going to tax electric vehicles because the batteries cause damage to the environment (and we don't have a good way to dispose of them yet)? How about the electricity used to charge the vehicle itself? Will that be taxed as well unless it's solar/wind/hydro?