The problem with increasing the price of gas is you hurt the poor most of all. Honestly, jacking up the price of gas isn't going to change my driving habits at all, but doubling the cost of gas (for example) will absolutely impact the budget of a lower income person who is commuting to work in an older car. They can't afford a newer car, they can't afford to move closer into the city, and there isn't public transportation available. They have no options other than to cut back on things like food and braces for their kids, etc... (sure some folks blow lots of money on cigs, big screen tvs, beer, etc... - but honestly the majority of people who are just scraping by, are doing their best).

Figure out how to make it affordable (while being safe) for people to live closer into major cities, and you'll have a real impact on gasoline usage.