1. Determine the actual marginal environmental cost of an extra tonne of CO2 emissions -- current estimates are between US$10 and US$80.
2. Tax fossil fuels at this level at the point of extraction -- it's a lot easier to tax a few hundred mining and oil companies than it is to tax a few billion consumers. Also tax deforestation and other activities likely to put more CO2 into the atmosphere. Guarantee the tax level for at least 15 years (possibly with an inflation adjustment) so that people and companies can make long term investments based on it.
3. Rebate the tax to any user of fossil fuels who can demonstrate that their use will keep the CO2 out of the atmosphere for at least 500 years. Give a similar rebate to anyone who demonstrably removes CO2 from the atmosphere for at least 500 years.
4. Keep 10% of the funds raised for UN programmes to help countries who are especially affected by climate change. Pay the remainder to national governments in proportion to their population as at 1 January 2009. Permanent migrants get their share transferred from their old country to their new one, so you need to recalculate the shares every ten years or so. It's up to the governments if they use the money for subsidising fuel for poor people, climate change mitigation, or fancy new presidential palaces.
5. Do nothing else -- leave it to the market to decide how much to insulate homes, what kind of light bulbs to use, how many airports to build, whether or not to use patio heaters, etc.
A one-way flight to the US from the UK produces about 1.25 tonnes of CO2 per passenger, so the fuel for such a flight would be taxed at between US$12.50 and US$100. Air Passenger Duty for such a flight is currently £40, and will be £150 from November 2010, so it's currently about right, and the increase is not necessary.
A litre of petrol gives off about 0.0025 tonnes of CO2 (2.5kg), and so should be taxed between 2.5 cents and 20 cents -- UK fuel duties are a lot more than this, so drivers are more than covering their climate change costs.