Re: 'We...
Unless the images are cartoon/CGI
Under UK Law, even cartoon porn images are illegal. As are images of people well above the age of consent dressed up as children in a pornographic setting. Yes, we have totally bollocksed laws.
Stamping out the incentive to create images like that will protect children
There are two assumptions in that single sentence; that such prosecutions will have any impact whatsoever on the incentive, and that reducing the supply of images will prevent further abuse.
I don't think we have any data on the first - although it can be shown that, in situations like drug use, a relaxation of the law can show a decrease in use, I don't think that sort of study is applicable here. In short - we can't know.
But as to the latter - child abuse has been with us for millennia[1], so it's unlikely that we'll actually be able to stop it. There is an argument that says that a paedophile getting his rocks off to an image of an abused child is one that's not actively abusing another child; if this is the case - and I've not looked for studies so I don't know - then reducing the supply of images is actually likely to cause increased future abuse.
And that's the trouble with getting too emotional over various sorts of crime; although we'd obviously all like child abuse to stop forever, picking remedies because they "feel right" can often make the problem worse rather than better. It's entirely possible that the real solution is public dismemberment of anyone actually caught abusing children[2], but possession of child pornography be permitted to those who have registered themselves as being at risk of committing such an offence.
Or matbe it's something else entirely. Without objective studies, we'll probably never know.
Vic.
[1] My old classics teacher told us that the Ancient Greeks believed women were for procreation, boys for recreation.
[2] It concerns me significantly that copying an image - by, for example,downloading it from the Internet - is considered "creating an image" under UK law, and so is punished in a similar fashion to actually holding the camera whilst a child is being abused.