Gas at $5/gallon? SUVs are not a problem, and commuting 1.5 hours in individual cars is a thing. Gas at $30/gallon, and you will see people demand more high density communities with walking/bicycling/public transit infrastructure.
You would need to figure out which employee is driving which kind of car with which kind of emissions systems, then keep records of all of that, and then hire people to audit it, and then prosecute corruption.
All unnecessary.
The direct impact will easily be felt by businesses who unnecessarily require commuting because they will become less competitive. They have to pay their employees more than their competitors to pay for the commute, hence the prices for their products/service are higher than a competitor who does not require commuting. Obviously, this does not manifest at $5/gallon. It needs to be something that hurts, like $30/gallon, and not just at the fuel pump, but at the refinery/extraction level so everything that causes GHG emissions gets hit.
It is simple, easy to audit, fewer entities to audit, fewer chances for corruption, and easier to prosecute if need be.
And if living closer to work costs more, then the employer is going to have to pay more to have their employees afford to live closer.
Should the employer pay for someone to commute 4 hours? How about a 2 hour flight everyday? This is all arbitrary, but it is much simpler to just let the market sort it out.
Employer offers $x for employee to be in y place at time z. Employee figures out if $x is enough to incentivize them to be there at the time, and otherwise asks for more money or seeks other employment.
If employer does not find sufficient employees at $x, then they have to increase.
In terms of commutes I think you're thinking too much with programmer brain - when it comes to laws of society we have the reasonable person/common sense standard. Companies should reimburse a reasonable commute to the office - if you're thirty minutes by car then gas reimbursement is reasonable... but if you choose to make that commute in a helicopter the costs of operating that helicopter are not reasonable.
And why is an environment damaging car considered be reasonable instead of a 30min bicycle? Or a Prius instead of an F250? What about variances? Road closures? Dropping kids off on the way? All unnecessary complications and arbitrary classifications.
The goal is to reduce carbon emissions, not subsidize individuals’ living preferences.