If you read this blog you're probably aware that I think cap-and-trade is too much of a fancy, thinktank hipster/wonk solution; there are a lot of interesting failure modes. Instead, I support the tax that gets to the cause of your problem; higher VAT on fossil fuels is hard to evade (and harder the more fuel you're trying to evade it on), simple to apply, cheap to collect through the existing and very efficient administration, and directly matched to the problem. It's regressive, but that can be fixed by paying out the cash, perhaps under a negative income tax or citizens' income system. (As Daniel Davies would say, many schemes to aid the poor have been proposed but the only one to show consistent success is money.) And we could do it tomorrow; if it only took two days to nationalise the Northern Rock, this is quite a lot simpler.
A carbon dioxide tax, of course, doesn't need a carbon dioxide market and therefore isn't subject to this problem. It doesn't need to decide what counts as an offset; it certainly doesn't require some fiendish extension of the surveillance state like road-pricing or personal cap-and-trade. It just requires a higher rate of VAT on stuff that burns and came out of the ground.