Mandatory US emissions caps could soon become a reality following the introduction yesterday of a new climate change bill that proposes a major cap-and-trade scheme designed to cut US carbon emissions.

Introduced to the Senate by senators Joe Lieberman and John Warner, the bill has bi-partisan support, increasing its chances of gaining the necessary votes. Experts said that while the bill would face a potential veto from President Bush, it is unlikely to be passed until 2009 or 2010, by which time a new President will be in place.

Under the proposed legislation the US would introduce a cap-and-trade scheme covering emissions from electric utilities, transportation and manufacturing. Bearing similarities to the current European Emissions Trading Scheme, the proposals would allow firms that cut emissions below the level required to sell their excess carbon credits or allowances to those that exceed their emissions targets, creating a financial incentive for firms to cut their carbon footprint.

Under the scheme, emissions would be cut by 15 per cent by 2020 and 65 per cent by 2050.

Both Lieberman and Warner argued that the legislation was necessary to curb climate change and enhance US security.

"In my 28 years in the Senate, I have focused above all on issues of national security, and I see the problem of global climate change as fitting squarely within that focus," said Warner. "Senator Lieberman and I found a good, sound starting point that sends a significant signal that the US is serious about taking a leadership role in reducing its greenhouse gas emissions."

The bill was broadly welcomed by environmentalists who argued it represented an "historic" step towards reducing US carbon emissions.

However, some criticised the bill for failing to deliver deep enough emission reductions and auctioning off less than a quarter of the carbon credits with the bulk being allocated to polluters for free.

A Friends of the Earth report argued that the coal industry alone would receive up to $231bn worth of credits for free under the scheme, while critics argued that the European Trading Scheme had failed to have a major impact on emissions because firms were assigned carbon credits for free, minimising the financial incentive for them to cut emissions.

However, supporters of the bill insisted it represented a good compromise, delivering mandatory emission cuts without imposing too large a financial burden on the business community.

Barbara Boxer, chair of the Senate Environment and Public Works Committee, also moved to reassure businesses that the new scheme would integrate effectively with state-level legislation, such as California's own plans for a cap-and-trade scheme.

The bill is likely to continue to face stiff opposition, however, with climate change sceptic Senator James Inhofe insisting he would argue against legislation that he claims would "burden American families with additional energy costs and significantly harm the United States economy".

However, commentators remained optimistic the bill could be passed within the next three years, further raising the chances of a global emissions trading scheme incorporating both US and Europe's trading mechanisms being introduced from 2012 as part of the post-Kyoto agreement.