Improving efficiency helps everyone because there is not going to be any overnight and likely within one generation shift to another lifestyle. You will never have all the jobs needed within a city to support all the people who live there. As in, your electronics, your food, and many other items, will be produced elsewhere and have to be sent there. The only things cities can self support usually are services.
Cars became popular not because fuel is cheap, they became popular because they represent the freedom to go where you want when you want. You are not restricted to some bus or train line whose routes and times are determined by a government agency.
So efficiency of the internal combustion engines is a needed move simply for the reason that not everyone can be put on the same schedule to change to the next means of individual travel.
So I could say OP is more off than you think, and he could say... whatever. The worse the situation will get, the more people will be willing to sacrifice their well-being, invest in groundbreaking expensive new tech etc. We are not there yet, not the nations holding most of cash in their pockets.
Oh, and don't get fooled - you can put any cancerous lung photos on cigarette packages, I don't know a single smoker that would change their habit based on this. They ALL know it's bad and can kill you and go on nevertheless, don't treat people like stupid children.
Sure we can. It's called nuclear power. Too bad we're not allowed to use it.
"US people have a difficulty understanding this, "
Europeans have difficulty understanding the size of the United States. Oregon, a medium-sized state, is larger than the UK. Texas is larger than France. Alaska is larger than all of Western Europe.
Canadians use even more fossil fuels than Americans, and for the same reason. It's a really, really big country.
It has nothing to do with "cities". Our cities are reasonably high in density already, and the high density cities do have public transportation.
We just have a lot of people who don't live in cities, and we like it that way just fine.
The CO2 emissions themselves are not the whole problem. It's the fact that they are coming from a source that is introducing new carbon into the cycle. It's not the engine, it's the way it is produced and the fuel we use.
Public transportation, except for perhaps NY, is actually less efficient than driving because no one uses it. It'd be cheaper to just buy everyone a Prius than most of these light rail or streetcar projects and it'd be better for the environment.
We need to reduce our lifestyle. Live closer to workplaces so we don't need the car at all, which requires a complete rearchitecture of the cities where jobs are knit with housing and public transport, like Sydney or many places in Europe. US people have a difficulty understanding this, because petrol have been so cheap and untaxed for so long that they've built their cities around "1 car, 1 person" - and now they secretely hope for fuel efficiency improvements "to maintain their lifestyle". No, sorry, they're just killing the planet.
"What about China, who pollutes much more?" Yes, they should be allowed to reach their economic development, because US should pollute much less per inhabitant. An American emits 6x what it should, a Chinese person 1/6th.
This is why GP wrote this warning. And it's important because some people still don't believe it.
Similarly, cigarette packets still have to remind "Smoking kills", because a lot of smokers aren't persuaded yet.