You say there will be an increase in greenhouse gasses, such as CO2, but you are overlooking something. If ethanol were to become the major fuel source for automobiles, it will become a massive industry and millions more acres will be planted. Plants will then, in turn, produce oxygen from that CO2, while producing more ethanol.
Here’s another thought – How about we stop ruining and destroying plantlife such as forests? That would contribute greatly to CO2 levels.

If I had to choose, I would much prefer to have something that can be reversed into oxygen, like CO2, produced than have excess levels of CO (Carbon Monoxide) and many other smog gasses. Carbon Monoxide not only is detrimental to the health of humans, but it also takes the loosely-held oxygen atom in O3 (Ozone) and becomes O2 (oxygen) and CO2.
Trust me, CO2 is the least of our worries.