Back now with DAY TO DAY. Honda says it's designed a diesel engine for cars that is as clean as a gasoline-powered engine. Car-industry experts say the development could be a major breakthrough for wider acceptance of diesel engines. MARKETPLACE's Bob Moon joins us now. And Bob, why is this new engine from Honda so significant?

BOB MOON: Well, first off, Madeleine, Honda is the world's largest engine-maker, so right there you can see that this is going to have an impact. It's a big story for more than a few reasons, though. It's not just fuel economy that the big car-makers are battling over these days. They're also trying to grab the competitive edge when it comes to selling environmentally friendly cars.

Lately, Toyota has been getting a lot of attention in that ring with its popular Prius hybrid. Toyota currently leads, in fact, in production of gas-and-electric hybrid cars. So that's one of the reasons that Honda's been working so hard to develop what's being billed now as this super-clean diesel engine. The big motivator behind this, though, is the challenge of meeting these tough air-quality standards that are set to go into effect in 2009 here in the state California.

These regulations are a lot more demanding than federal rules that are being phased in between now and 2008, so this development would make Honda the first car-maker anywhere to have a diesel engine that's capable of complying with these California standards. One reason that that's important is that nine other states have adopted California standards, and they make up more than 20 percent of the car market in this country.

BRAND: So these diesel engines may be more environmentally friendly. What else is attractive about them for consumers?

MOON: Yeah, there's a potentially big selling edge here. Besides producing about 30-percent less carbon dioxide than a regular gasoline engine, diesel engines typically get as much as 30-percent better mileage than gasoline engines. In other words, we're talking fuel economy that's comparable to the hybrids that are being sold out there right now.

The problem up to now has been that these diesel engines belch out these harmful clouds of soot and nitrogen oxide. Honda says this new engine doesn't sacrifice any of the fuel economy for the technology that they use to clean up these emissions, though. The engine is said to get 30-percent better mileage than an equivalent gasoline-powered model.

BRAND: So you can think about not converting your diesel engine to veggie oil. You could just go with this. What about other car-makers? What are they doing developing this kind of engine?

MOON: Well, they've been trying. Volkswagen and DaimlerChrysler, they're the biggest sellers of diesel-powered cars, but they haven't been able to crack this yet. They haven't been able to offer those models here in California and the other states that use these tougher standards. So this is a big achievement for Honda.

Today in the MARKETPLACE newsroom, we're looking into just how much advertising money is wasted on consumers. It turns out a lot of those ad dollars miss the mark.

BRAND: Thank you, Bob. Bob Moon of public radio's daily business show MARKETPLACE, produced by American Public Media.

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