California's Gov. Schwarzenegger yesterday signed a pioneering bill to reduce California's greenhouse gas emissions--not by controlling energy use directly, but instead by curbing sprawl development that makes long car trips all but inevitable.

SB375, authored by State Sen. Darrell Steinberg (D-Sacramento), aims to reduce the number of miles people drive by promoting housing and land-use plans that foster sustainable communities, alternative transportation options (including walking), and healthier lifestyles.

The new law is the first of its kind in the country. "This landmark bill takes California's fight against global warming to a whole new level, and it creates a model that the rest of the country and world will use," Governor Schwarzenegger said.

To learn more about some of the planning options Steinberg has in mind, check out the new report Smart Infill, published by the Bay Area conservation organization Greenbelt Alliance. Steinberg says it gives "local leaders practical tools to encourage climate-friendly development in their communities."

Billionaire investor Warren Buffett is making another energy play, announcing on the weekend that his MidAmerican Energy Holdings Co. will purchase about 10 percent of China's BYD Company Ltd., a maker of rechargeable batteries and automobiles, for $230 million. The move -- Buffett's first strategic investment in China -- follows MidAmerican's announcement earlier this month that it would acquire East Coast utility Constellation Energy Group Inc. for $4.7 billion. 

MidAmerican and BYD will work on new rechargeable battery technologies for vehicles and to store electricity from wind and solar power generation. "The rationale behind this investment is BYD's unique exposure to both lithium-ion batteries as well as its related hybrid electric vehicle business," Merrill Lynch analyst Daniel Kim told Bloomberg News. The "HEV market growth is exploding."

BYD aims to sell gasoline-electric hybrid cars in China later this year and to introduce hybrid vehicles in the U.S. and Europe in 2010. The Big Three U.S. automakers are scrambling to develop hybrids, and they got a boost on the weekend when the Senate approved a spending bill that included $7.5 billion to start a $25 billion low-interest loan program to retool old plants and help the industry develop new fuel-efficient vehicles. The House has already approved the bill.

A roundup of green headlines that caught our eye this week:

• Sustainable is one of the top categories featured on NEXT100, so Andy Revkin's post on sustainable cities on his DotEarth blog seemed right for this week's roundup. Portland, Oregon, again topped a list of 50 U.S. cities compiled by SustainLane.com, a publisher that reviews things that are supposed to be good for you. The Rose City has topped the list for social and environmental sustainability since it began in 2005. San Francisco was No. 2 for the second consecutive year.
• Another piece on sustainability:environmental and aid groups are urging wealthy industrial countries to pay poorer nations to preserve their forests and jungles. Tropical forests absorb carbon dioxide, the main greenhouse gas. Deforestration releases large volumes of CO2, threatening to cancel out emission reductions elsewhere. 
• A U.N. report this week -- "Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World" -- says more than 20 million jobs could be created as countries move toward new energy sectors, including wind, solar and geothermal power. Some 2.3 million people are now working in alternative energy jobs, with half in biofuels, according to the report.
• Shifting gears to plug-in vehicles, Montreal-based Dorel Industries is introducing a lithium-ion-battery-powered "e-bike" -- the Schwinn Tailwind. It claims to recharge the battery in only 30 minutes compared with four hours or more for a standard e-bike. The price: $3,200 (U.S.). 

"Filling up" your car from an electrical outlet rather than the gas pump is a winning strategy for the environment, according to a new study by San Diego Gas & Electric.

The Southern California utility spent a year testing two plug-in hybrid electric vehicles, converted from standard hybrid models with a lithium-ion battery kit. Regular hybrids typically use a gasoline or diesel engine to recharge their relatively small batteries; plug-in hybrids recharge from a wall socket in a few hours and are designed to go much longer distances on battery power alone.

The results were impressive:

When compared with the standard hybrid, the plug-in hybrid achieved a 60-percent increase in gas mileage, a 37-percent decrease in carbon dioxide (CO2) tailpipe emissions, and an 18-percent reduction in fuel costs. When compared with conventional gasoline-fueled vehicles that average 22 miles per gallon (MPG), the fuel cost savings jump to 57 percent.

The economics of operating plug-in hybrids suggest that owners will feel as good about their pocketbooks as about the environment. At today's average gasoline prices, drivers of plug-in hybrids would save an average of about $1,500 per year in lower fuel costs, the utility reports.

Plug-in hybrids should begin hitting auto showrooms in significant numbers by 2010; the main holdup has been manufacturing high-performance batteries that are safe, reliable, and affordable.

PG&E, an early supporter of plug-in hybrids, has been testing a converted Toyota Prius hybrid with similar results.

This year, PG&E also joined a research and development initiative led by the Electric Power Research Institute (EPRI) to smooth the integration of new fleets of plug-in hybrids into the nation's electric grid.

Between 2010 and 2050, according to a study by EPRI and the Natural Resources Defense Council, such vehicles could help the United States cut greenhouse gas emissions by up to 10 billion tons, an enormous contribution to fighting global warming.

Californians have one month left to register their views on an innovative proposal by the state Department of Insurance to help the environment by fundamentally reforming the way we pay for auto insurance.

The new insurance option, proposed by Insurance Commissioner Steve Poizner, would let drivers pay by the mile, linking their costs more closely to actual car use--and thus car pollution--than is the case with traditional premiums. His proposal has reportedly been endorsed by the California Air Resources Board.

A study published this summer by the Brookings Institution in Washington, D.C. explained the linkage between auto insurance and the environment:

The current lump-sum pricing of auto insurance is inefficient and inequitable. Drivers who are similar in other respects--age, gender, location, driving safety record--pay nearly the same premiums if they drive five thousand or fifty thousand miles a year. Just as an all-you-can-eat restaurant encourages more eat­ing, all-you-can-drive insurance pricing encourages more driving. That means more accidents, congestion, carbon emissions, local pollution, and dependence on oil. This pricing system is inequitable because low-mileage drivers subsidize insurance costs for high-mileage drivers, and low-income people drive fewer miles on average.

A better approach is simple and obvious: pay-as-you-drive (PAYD) auto insurance. . . . With insurance costs that vary with miles driven, people would be able to save money by reducing their driving, and this incentive would lead to fewer driving-related harms. PAYD would also be more equitable because it would eliminate the cross-subsidization of insurance costs from low-mileage to high-mileage drivers.

The Brookings research team concluded that California would see significant benefits from such a scheme:

• PAYD would result in an 8 percent driving reduction from light-duty vehicles.
• Estimated gross annual social benefits from an 8 percent driving reduction total $10.8 billion based on current driving levels, and $21.1 billion based on 2020 projections.
• The California state government would save $54 million annually based on 2006 data and $60 million annually based on 2020 projections.
• PAYD would generate 7 to 9 percent of the total CO2 reductions needed to meet California's emissions targets for 2020.
• Nearly two-thirds (64 percent) of households in California would have lower premiums under PAYD. The average savings for that group would be $276 per vehicle per year (in 2007 dollars). Low-income drivers would benefit especially.

The Insurance Commissioner's office says it has scheduled a public hearing on October 20, at 45 Fremont St. in San Francisco at 10 a.m., to take final comments on the plan. If approved, the plan will take effect not later than next fall.

Yesterday was a busy day for energy efficiency advocates, who contend that drilling offshore for oil is not a panacea for U.S. energy needs. In addition to the Energy Future Coalition statement discussed below, the august American Physical Society issued a major report on Tuesday titled Energy Future: Think Efficiency, calling for active federal promotion of energy efficiency research and development.

The society's web site notes that the APS "represents more than 46,000 U.S. physicists in academia and industry and includes nearly 60 Nobel Prize Laureates." The APS has a history of advocating energy research dating back to 1975, during the first oil crisis.

This report--drafted with the help of local experts such as Dan Kammen at UC Berkeley, Mark Levine at Lawrence Berkeley National Laboratory, Burton Richter of the Stanford Linear Accelerator Center and Dan Sperling at UC Davis--focuses on the need for more research funding and tighter federal energy standards in the transportation and building sectors. Together those sectors account for 68 percent of U.S. oil consumption and about 70 percent of U.S. carbon emissions.

Their recommendations won't break the bank--for example, they'd like to see a relatively modest increase of about $150 million in federal R&D for building energy efficiency, as well as a significant boost in research support for battery technology for electric vehicles.

More controversially, they support mandating fuel economy of at least 35 miles per gallon for gasoline-powered light-duty vehicles (including SUVs and pickups) by 2020, rising to 50 mpg by 2030.

In addition, they propose measures to achieve "signifcant levels of construction of cost-effective residential zero energy buildings (ZEB) -- buildings that use no fossil fuels -- by 2020."

Fuel efficiency is an old idea, but the ZEB concept is catching on fast. Last year, New York Senator Hillary Clinton introduced the "Zero-Emissions Building Act of 2007," which directed federal agencies to steadily reduce the carbon footprint of new or renovated federal buildings until all became "zero-emissions" buildings by 2030.

Think plug-ins are the next big thing? Think again.

A company called Moller International took plug-ins a huge step forward this week when it announced the completed design of a vehicle which functions like a plug-in hybrid when on the road and gets vertical lift. Moller's Autovolantor can get you out of any traffic jam quickly, by lifting off vertically and flying up to 150 mph for a short distance. While the prototype cost around $5 million, Moller thinks it can deliver a commercial product at $250,000. No word yet on when one of these roadable aircrafts would be available or even the regulatory implications. But if you'd like to get into the nitty gritty, check out this preso from Moller on the autovolantor.

Following on the heels of the Plug-in 2008 conference, which had a number of exciting announcements, a stream of electric vehicle news continues to roll in  . Here's a quick rundown of the top highlights:

•  The San Francisco Chronicle reports that electric vehicle maker Zap received a healthy $10 million dollar vote of confidence from a Dubai entrepreneur. Although the cash infusion will be used to boost production, don't get your hopes up too high. Demand for Zap's silent, light EVs is so high that the money is already allocated to fill past orders.
  


• Associated Press covered the unveiling of Nissan's electric vehicle test model. It will be available in Japan and the U.S. in 2010 and globally in 2012.
  


• Mitsubishi Motors today announced its all-electric vehicles are coming to California - utilities, that is. PG&E and Southern California Edison will take delivery of the i MiEVs for fleet testing. Through daily operation, we'll gauge the viability of using these all-electric vehicles in our fleet and better understand the charging impacts on the grid. Mitsubishi's i MiEV, which can get up to 100 miles on a single charge and speed along at a zippy 85 mph, has already been extensively tested and well-received by Japanese utilities.
  


• Think you'll miss the familiar rumble of a combustion engine in your eco-friendly electric vehicle? No worries. Lotus has developed technology to simulate the noise of a real engine to make vehicles more audible. This is especially helpful for pedestrian and bicycle safety.

The Plug-in 2008 conference officially opened today and hit the road running with a flood of electrifying announcements. A unifying focus was building the ecosystem necessary to ensure that when PHEVs begin to hit the market in the 2010 timeframe, they do so seamlessly and in a way that benefits consumers, the environment and the grid.

• GM was the belle of the ball with its joint EPRI announcement to work with 34 utilities, including yours truly, to accelerate the introduction of PHEVs. Click here for the Wall Street Journal's report.
• The City of San Jose is partnering with Coulomb Technologies to install electric charging stations in garages and on street lights. The Mercury News' Matt Nauman gives the download on the effort.
• eTec, a battery manufacturer, launched a program with the U.S. Department of Energy to research bi-directional fast-charging operations for PHEVs.
• Raser Technologies announced their plans to develop a 100 mpg plug-in hybrid light truck. PG&E will take delivery of one of the first vehicles for testing and demonstration within our fleet.

It's exciting to see these companies firing on all cylinders as the electricity and transportation sectors converge before our eyes. If you want to learn about how PG&E is prepping its grid for the future, check out Dow Jones' MarketWatch piece on creating a smarter, faster grid.

Expect a jolt of news about new plug-in hybrid cars this week from the Plug-In 2008 conference in San Jose. Some news broke early on Friday when Reuters, citing unnamed sources, reported that General Motors and the utilities group Electric Power Research Institute will announce at the conference a partnership to promote the sale of electric vehicles. Ford Motor announced a partnership with Palo Alto-based EPRI in March.

GM is developing the rechargeable Chevrolet Volt expected to enter production in 2010 with a range of 40 miles from a lithium-ion battery pack that could be charged from a standard power outlet. The Volt also will have a gasoline engine to recharge the batteries for longer distances, according to the report. Toyota and other automakers are expected to introduce plug-in hybrids in the next few years.

The automakers, electric utilities (including PG&E), battery-makers, business and environmental groups, engineers, scientists,market analysts, and more will be at Plug-In this week for a series of market and technical panels, including vehicle-to-grid technology. My colleague Jennifer Zerwer will be blogging here from the conference.