The history of engine improvements in the U.S. has tended primarily in one direction: raw horsepower. Engines have gotten bigger and more powerful over time—and that's certainly what automakers have used as a key selling point. But U.S. automaker Ford has decided to take turbocharging and direct fuel injection in another direction: fuel efficiency.

Yesterday, Ford began production of what it's calling the EcoBoost engine: a new gasoline motor that employs turbocharging, direct fuel injection, variable timing in the valves that control fuel and exhaust flow to make a smaller, lighter six-cylinder engine perform like an eight-cylinder engine.* When these technologies are combined, "you can now significantly downsize the engine," says mechanical engineer Dan Kapp, Ford's director for power train research. "The fuel efficiency comes from a much smaller displacement engine providing equal or, in most cases, superior performance to the engine you're replacing."

The Obama administration unveiled a plan to boost fuel efficiency standards for cars and trucks to an average of 35.5 miles per gallon by 2016—four years ahead of current schedule and up from an average of just 25 miles per gallon today.

The new standards (pdf) will also impose—for the first time ever—a limit on greenhouse gas emissions from vehicles at 250 grams per mile in 2016 under the new proposed rule. (That’s about 5.5 ounces per kilometer, for those of you who like your units mixed differently.)

There are very few vehicles capable of meeting the new standards today, which would mean more hybrids and possibly even electric or other alternative vehicles would have to hit the road within seven years for automakers to comply.

The President and Congress may not be in agreement about how best to deal with climate change, but it appears that they do agree on at least one thing: they'd like to give you money to trade in your old (polluting) car.

Under the terms of a provisional agreement between the president and Democrats in the House of Representatives, a "Cash for Clunkers" program would look something like this: Anyone who owns a car that gets less than 18 miles-per-gallon could trade it in for a voucher to offset the purchase of a more fuel-efficient car. Depending on exactly how fuel-efficient that new car or truck is, that voucher could be worth as much as $4,500—at least for the lucky first one million trade-ins.

You could get some green if you go green: President Obama is touting legislation that would pay drivers to turn in their gas-guzzling, exhaust-emitting cars for fuel-efficient vehicles.

So-called “cash for clunker” bills moving through the House and Senate would provide vouchers of $2,000 to $5,000 – depending on the age of the clunker, the fuel efficiency of the new car and where it was made – to buyers of greener automobiles. The old car parts would then be recycled. An incentive program in Germany that offered $3,290 to consumers who traded in their old cars hiked auto sales by more than 21 percent last month over the previous February, according to Rep. Betty Sutton (D-OH), who is sponsoring legislation on the issue.

California and other states that want to set stricter tailpipe emissions and fuel-efficiency standards may get their chance. Pres. Obama today ordered the U.S. Environmental Protection Agency (EPA) to review its rejection of the Golden State’s application for a waiver to the Clean Air Act, which allows states to enact their own rules if they can prove that they’re tougher than federal pollution standards.

Obama said during his campaign that he’d reverse the waiver rejection, the Associated Press notes, and the agency is expected to do so. New EPA Administrator Lisa Jackson said during her Senate confirmation hearing January 14 that she would “very, very aggressively” review California’s application, which was submitted in 2007 and denied later that year by the Bush administration, which agreed with auto industry arguments that it would be tough to enforce different standards across the country.