This report defines the benefit of upside hedge value: the extra avoided expenditures on gasoline and diesel fuel that accrue when their prices spike as a result of climate policies like AB 32 (California’s Global Warming Solutions Act). It develops two historically grounded price spike scenarios: a moderate spike of 25 percent and a large spike of 50 percent. After accounting for short-term price elasticity of demand effects, the upside hedge value is estimated to be between $2.4 billion and $5.2 billion (2007 dollars) for the moderate and large shock scenarios, respectively.