Carbon producers would have been able to trade emissions allowances
A US attempt to establish a system of caps and tax relief to cut carbon emissions has been blocked in Congress.
The bill was backed by most senators, but did not get the 60 votes needed to stop a delaying tactic - a filibuster - used by the bill's opponents.
Even if it had succeeded in passing Congress, President George W Bush had pledged to veto the bill.
Lawmakers will now wait until next year - when there will be a new president - before attempting to pass a new bill.
The bill - sponsored by Republican John Warner and Independent Joe Lieberman - would have introduced caps on carbon dioxide emissions from power plants, oil refineries and factories.
Carbon producers would have been granted emissions allowances, which they would have been able to trade with one another, providing them with an incentive to cut their emissions.
"It's a huge tax increase," said Mitch McConnell, leader of the Senate Republicans, most of whom opposed the bill.
Supporters of the new system said that tax relief would be provided to help people pay energy costs.
Neither John McCain nor Barack Obama were present for the vote, but both presidential candidates said that they would have supported the bill if they had been able to attend.