Fact is, a car getting 50 mpg, making 70 hp at wot will generate way less emissions than a 40 mpg car with a 140 hp at wot engine. But the 50 mpg, 70hp engine just may have more PPM of, say, NOx, than the 40mpg car. PPM is a stoopid measurement. How about using lbs of NOxx per 100 miles of combined city/highway driving. Now that makes sense. But that would allow a flood of vehicles in that not only create less of a total footprint than say a GM car, but would also hurt GM.
Follow the money.
I am not saying there should not be emissions standards; I am saying arbitrary numbers do not meet the end need. The end result should be reduced emissions per xx miles driven. The smaller engine will deliver 1/2 of the total flow of exhaust gas, at say a 10% increase in PPM, in effect, creating about 40% less emissions per trip.