The greater the proportion of produced gasses comprised by CO2, the better. On the other hand, if one can reduce the amount of work that goes into things such as drawing vacuum on the air intake or heating and pressuring the exhaust, one will reduce the amount of fuel/air mixture that needs to be fed through the engine, thus improving efficiency while reducing the production of everything including CO2.
I really don't know why more efforts aren't made toward such goals, though perhaps the tax benefits for hybrids are discouraging non-"hybrid" efficiency improvements.
in todays cars, the ram and scavenge effects have been tweaked and exploited to the max, within practical limits for production cars.....the same is true with the variety and sophistication of fuel metering and catalyst systems.
For the treehuggers:
We need CO2 to assure that vegetation has a plentiful supply to convert to O2.