Mr Obama wants to pass a bill before the Copenhagen summit in December
US President Barack Obama has welcomed the publication of a bill to combat climate change.
The bill, sponsored by leading Democratic senators, would establish a "cap and trade" scheme to cut greenhouse gas emissions.
It is similar to a bill that was narrowly passed by the House of Representatives earlier this year.
After healthcare reform, passing a climate change law is Mr Obama's biggest legislative priority this year.
The intention is to get a bill through Congress in time for the UN climate change conference in Copenhagen in December.
But observers say the bill will face a tough test in the Senate, as senators from both parties are wary of passing a bill that they say could harm the US economy.
The Senate bill, as drafted by Democratic Senators John Kerry and Barbara Boxer, would set down the target of cutting carbon emissions by 20% on 2005 levels by 2020.
In order to meet the goal, it would set up a "cap and trade" system.
Under the senators' proposals, a cap would be placed on the amount of greenhouse gases American companies are allowed to emit, and each firm would be granted permits, according to their size, allowing them to produce a fixed amount of emissions.
Companies that emit less than their permitted allowance would be able to make money by selling their permits to companies who wish to produce more than their quota, creating an incentive for firms to reduce their carbon output.
Gradually, the overall emissions cap would be reduced.
Critics say the measure could increase the cost of doing business, but its supporters argue that it will create new jobs in the renewable energy sector and help to avert a global climate crisis.
Mr Obama issued a statement thanking the senators for drafting the bill.
"With the draft legislation they are announcing today, we are one step closer to putting America in control of our energy future and making America more energy independent," he said.
"My administration is deeply committed to passing a bill that creates new American jobs and the clean energy incentives that foster innovation," he added.