Higher prices are not a bad thing. It depends what you get for the money. It might be a good thing to get people out of 3-ton pickups that are used to buy groceries and drive the kids to soccer and don't fit in mall parking slots. I, for one, am getting sick and damn tired of having car fenders dinged at truck bumper height in parking lots. It might be a good thing to have cleaner air.
Isn't that the entire point of pricing goods and services? That's how a market reaches equilibrium, that's how we know what's important, that's how we align incentives with the outcomes we want. They could have used them on Easter Island.
We're not going to have dirty air. Increasing clean air and car pollution standards will continue. It just that it isn't very democratic to have one state out of a country of 50 states define what those standards should be.
Regarding dings from SUV's you get on your smaller car, maybe you should give up driving and use a bicycle. That would also reduce CO2. You see, you might not like that if government imposes a standard to give up your car. The problem is once you give government all that power, you start to lose your personal freedoms. So regulations have to be balanced against keeping liberties. When you start taking liberties away from one group, then your next on the list. Pretty soon no one is free and you have nothing to drive like in Venezuela.
I don;t understand you repeating the "equilibrium" point. Government doesn;t decide the price of things. At least they shouldn't. A willing buyer and a willing seller decide on price. Do you want to go to a central planning system like they had in the Soviet Union. Government decided on how many of everything was made and what the prices were. That worked out well, didn;t it? The citizens suffered from constant shortages, loss of liberties, and in the end the country went belly-up.