[UPDATE: DH writes in to note that there are only 19.6 gallons of gasoline per barrel of oil, which contains 42 gallons. Numbers corrected below. Thanks!]

The Obama Administration’s announcement this afternoon of tightened fuel efficiency standards provides an excellent example of what the Congressional debate over cap and trade does not — a direct and obvious connection between the policy and the outcome, in this case reduced use of gasoline and by extension greenhouse gas emissions. If emissions are to be reduced then efficiency gains will necessarily have to be a big part of the equation. Speaking on a morning news program White House official Carol Bowner had this to say:

The new limits will save 1.8 billion barrels of oil over the program’s seven-year life, President Obama’s climate czar said Tuesday. Well the price of a car will increase, the Obama adviser also said consumers would save money in long run on lower fuel costs.

“[T]he American public — when they go to the pump, will actually save money. Their cars will drive further on a gallon of gas, and ultimately we’ll reduce our oil use by 1.8 billion barrels over the life of the program. Now, that’s good news,” White House energy and climate change advisor Carol Browner said on MSNBC Tuesday morning.

What are the carbon dioxide emissions consequences of 1.8 billion barrels of gasoline?

At 20 pounds of carbon dioxide per gallon and 19.6 gallons of gasoline per barrel the answer is 706 billion pounds of carbon dioxide or 0.32 gigatonnes of carbon dioxide (a gigatonne is a billion metric tons, and a metric ton is about 2,200 pounds, so 0.32 Gt = 706 billion pounds = 706/2,200). Over the life of the fuel economy program (7 years) this equates to a reduction of about 0.046 gigatonnes per year (i.e., = 0.32/7). In 2007 the US had about 7.28 Gt of greenhouse gas emissions, so the effect of the new emissions regulation on greenhouse gas emissions from a 2007 baseline are a reduction of about 0.6%. If this seems like a small number consider that the U.S. consumes 390 million gallons of gasoline per day (!), meaning that 1.8 billion barrels represents about 90 days worth of gasoline usage, or 13 days per year for the 7 years of the program.

So if the program actually saves 1.8 billion barrels of gasoline then the new standards over 7 years will free up 90 days of gasoline and reduce greenhouse gas emissions (from a 2007 baseline) by 0.6%. These numbers may seem small, but they are actually quite significant. Piece by piece, step by step are how efficiency gains are achieved in practice, and perhaps more importantly, when established as performance standards can be made permanent so the benefits continue (and indeed increase) indefinitely.