If production (and I would assume consumption) has increased, how is it possible? Are engines much more efficient now? Have we merely exported our pollution?
Mostly it's because cleaner natural gas is replacing dirty coal in electricity generation. Extracting and using natural gas generates far less indirect CO2.
Money is data, which is why most of it is stored and processed by computers these days. At its root, money data is about energy consumption. If new product B costs more than old product A, then B is consuming more energy somewhere, and indirectly more pollution. To find out where just follow the money.
Knowing that about pricing it is easy to determine that extracting petroleum at today's price of $60 a barrel requires far less energy and generates less pollution than when oil is at $100. Why: because as the demand for oil exceeds supply, oil producers start using more energy intensive methods to meet the demand, something not financially viable at lower prices.
It's also why Bill Gate's new $100 million investment in building a factory that extracts CO2 from the air is doomed. Based on the cost to do so it is easy to determine that his scheme will produce more CO2 than it extracts. It's a completely foolish endeavor, but Democrat Bill Gates never saw a tax incentive he didn't like.
It's also why carbon taxes will actually increase CO2 output. It's impossible for the government to spend the carbon taxes collected without consuming energy. Spending is the same thing as energy consumption. And nobody does that more inefficiently than government. The free market will need to spend and consume more to offset the investment dollars extracted to fund the massive increase inefficient spending.