Earlier quoted context omitted.
I think we should do neither. Impose a co2 emissions tax and let the market figure it out.
A carbon tax that would be high enough to force changes quickly enough would also be devastating for the poorer segment of the population and hence very hard to pass in a democracy. I mixture of a carbon price and other measures can be easier to sell to the voters.
Using X costs you Y Using XX costs you YYY Using XXX costs you YYYYYY
This way water, electricity would still be cheap for most and would incentivise to stop overusing it.
You could still get a cheap flight once a year, but you won't be able to fly every weekend.