Gasoline already costs about $6 per gallon in Europe. And yes,
many more people use public transportation, drive smaller cars
etc. Of course, some people drive cars which use a lot of gasoline,
but let's face it, if you have money to buy a Porsche 911, you don't
care about the price of gasoline. (I recently saw a new Bugatti
on the Autobahn, but I passed it at about 90 miles an hour. Not
everyone with a potentially gas-guzzling car actually drives it
that way, though of course even at 90 m.p.h. he was using a lot
more than I was with a 1.9 litre engine burning biodiesel.)

Is there any reason North America can't do what Europe is doing, apart
from voter stupidity, of course (and the two-party system, which is
another topic).

Carbon credits: the interesting question is whether the price really
does offset the detrimental effects. I think the prices are much
too low and/or, depending on the scheme, the positive effects of
the credit will kick in too late.

In general, of course, the correct way to do things is to put all
of the costs of driving (apart from buying the car) into fuel tax
(and get rid of vehicle tax, toll roads etc): this means less
overhead, it means an incentive to use less fuel and it means
that what actually matters, burning fuel, is what one pays for.
It's up to you if you burn a lot because you drive fast, drive
an inefficient car, don't carpool or drive at all if you don't
have to. (Of course, taxes should be lower if the detrimental
effects are lower, so tax biodiesel less than petroleum diesel:
in all cases, tax the actual costs to the environment).