Improving fuel efficiency is not very green.
To understand why this is so, simply imagine that an inexpensive vehicle could be brought to market which gets unlimited mileage and does not pollute.
What happens? More people have cars and drive them more. A lot more. More roads. More pavement. More consumption of resources manufacturing cars. There is a lot of developing world that can’t wait to pave over their wetlands and forests so they can drive these new fuel efficient vehicles.
I do not personally take much of a position on all of this, but I’m underwhelmed by the idea that fuel efficiency is going to solve anything. Since we don’t yet have perfectly efficient non-polluting vehicles, making the current fleet more efficient will simply expand the car culture…
Economically, oil prices right now (60-70 dollars a barrel) are enough to make other sources of oil financially viable. Those sources will be developed if prices maintain their current level.
In the long run gasoline prices are not going to go much higher, even though they may in the short run. We are going to have to decide if we want to encourage driving or not by some means other than the natural price of gas. To a substantial extent more efficient cars simply lower the effective price of gasoline and do nothing except make even more cars available to more people.