<Smaller cars. People need to choose them. Taxes and surcharges are the only equitable way because you can educate people, but Id, Ego, and SuperEgo will always win in the end.

Taxes and surcharges are a lousy way to handle it. If the price of oil goes up drastically, people will deal with it by getting smaller cars, paying more for gas, or some other method which is up to each individual citizen. In addition, some other method of automotive propulsion may become financially feasible. The government doesn't need to get into it at all.

Of course, taxes and surcharges are preferred by the government because the money goes into their pockets, instead of staying in the private sector.