When did it become universally agreed that carbon taxes are better than "clunky" things like CAFE limits?  Is there really enough empirical data to make that call?  If we had kept Jimmy Carter's CAFE during the Reagan administration the whole SUV market might have gone technologically in another direction, or we may have seen hybrids MUCH sooner.  

And yeah, politically, taxes can be moved up and down on the whim of an administration (think George W. Bush wouldn't have done this post-9/11?)  Everyone loves a tax reduction, but try lowering CAFE's in this environment (the 2006 Congress just got them increased).  

Carbon taxes are more effective than CAFE largely because they affect ALL producers of carbon - power plants, factories, etc.  More closely aligning the economic costs of pollution with their environmental costs creates a broad market incentive to invest seriously in alternative fuels, allowing the cleanest and most economically viable ones to emerge naturally rather than through the heavy hand of subsidizing favorites.  Or at least, so goes all of the economic reports I've read about the topic.  I haven't read much to convince me otherwise, but by no means am I an expert on the topic.  That said, I think CAFE standards (and other hard limits on polluters) are necessary in the medium-term, and they're clearly more politically viable than anything that includes the "T-word" in this country.

I think different methods need to be used for different problems.  With industrial output, a cap-and-trade system could work to reduce emissions.  A carbon tax would theoretically create a incentive for manufacturers to find new, more efficient ways to produce goods.

But on the personal consumption side, carbon taxes won't do much and stricter controls must be in place.  After all, you buy the slow but fuel-efficient economy box because it's all you can afford, while someone who has money to burn drives a Hummer that pollutes enough for three people.  Doesn't do much to reduce the actual output of carbon into the atmosphere - which is the whole point, right?

I'm for whichever is easier to enforce. Because the Clean Air Act, under the Bill Clinton administration, was flat-out ignored.

missouri.sierraclub.org/.../sierra_club_wins_clean_air_suit__ozone.htm

What really needs to happen is to have both an efficiency mandate across the board plus a carbon tax-credit/penalty. If a manufacturer chooses to make an efficient car (both because of market demand and government requirements) then said manufacturer receives a credit write-off or retooling rebate to do so. The consumer receives a rebate or tax credit for buying the more efficient product. The issue of buying large-ticket items like washing machines, furnaces, A/C units, or cars is that 95% of the people buying them ook at initial cost, features, and efficiency last. Never factoring in the fact that energy costs will continue to rise and the hidden taxes that go with buying an inefficient machine - more maintenance costs, energy costs, etc. Both Federal and State governments need to do a better job of incentivizing the purchase of efficiency with tax credits, rebates and efficiency mandates, plus price penalties for inefficient purchasing and / or manufacturing and taxes on fuel that promotes inefficient activity will result in a quicker lifestyle change out of necessity since most Americans are willfully reluctant to move out of their comfort zone of conditioned supply of air without poking and prodding them with stick.