This "low carbon fuel standard," designed to stimulate improvements in transportation-fuel technologies, is expected to become the foundation for similar initiatives in other states, as well as nationally and internationally.

The new standard was commissioned in January by California Gov. Arnold Schwarzenegger. He asked the university's top transportation-energy experts to design a standard that would reduce carbon emissions from fuels by 10 percent by 2020. Carbon and other greenhouse gases trap heat in the Earth's atmosphere and are a major cause of global climate change. In California, transportation fuels account for about 40 percent of all greenhouse-gas emissions.

The low carbon fuel standard's authors are Alex Farrell, UC Berkeley associate professor of energy and resources and director of the campus's Transportation Sustainability Research Center, and Daniel Sperling, professor of civil and environmental engineering and director of the Institute of Transportation Studies at UC Davis.

"This new policy is hugely important, and has never been done before," said Sperling. "It will likely transform the energy industries. And the 10 percent reduction is just the beginning. We anticipate much greater reductions after 2020."

In part one of their report, completed in May, Farrell and Sperling evaluated the technical feasibility of achieving the 10 percent cut by 2020. They identified six scenarios based on a variety of different technologies that could meet or exceed this goal, and concluded that the goal was ambitious but attainable. At the end of June, the California Air Resources Board voted to start working toward that goal, with the new standard taking effect by January 2010.

Today, in part two, Sperling and Farrell examine many of the specific policy issues involved in designing a low carbon fuel standard. The low carbon fuel standard, together with California's vehicle greenhouse-gas standards, will advance automobile technologies and contribute significantly to achieving California's climate change goals.

"Stabilizing the climate will require major changes in the coming years, and the new fuels that will come on the market in response to the low carbon fuel standard will be an important part of that change," said Farrell. "One of the key roles for the state agencies will be ensuring that the competition among the different fuels results in real carbon emission reductions, more consumer choice and minimal costs."-Berkeley University