Okay maybe my crusty banger was the wrong example:
Would you rather have engine A that does 60mpg and produces 80g/km of CO2, or engine B which does the say mpg but burns “dirtier” and produces 150g/km?
You need to tax in a way that encourages engine A.
Fuel tax doesn’t do that. Vehicle Tax does, a bit.
I disagree (with my emboldened bit).
I drive my weekend bit of fun (engine B if you like), but commute by bike during the week.
I do few miles a year (in the car) and produce X amount of pollution.
My neighbour drives his engine A car everywhere, producing 2X amount of pollution.
Why should we incourage the neighbour?
ETA: your example still isn’t realistic, cars aren’t efficient or inefficient enough to give that great a disparity between CO2 and mpg.