Environment Secretary Hilary Benn says he is putting forward a tougher, more effective and more transparent bill to help tackle climate change.
The UK's target to reduce CO2 by 60% by 2050 could be upped.
There will be a new carbon trading scheme for large and medium-sized firms which will cut more than 4m tonnes of carbon dioxide a year by 2020.
The Bill will make the UK the first country to put carbon emissions reduction targets into law.
He spoke as MPs called for a climate change minister to be appointed.
The Environmental Audit Committee wants a cross departmental climate change minister to drive government policy and who could attend Cabinet meetings.
Mr Benn said the government would amend its draft climate change legislation following a three-month public consultation and scrutiny by three parliamentary committees.
An independent committee on climate change would be set up that would advise on "five year carbon budgets" - part of a new commitment to carbon reduction
"We will use the bill to introduce carbon trading in further sectors," said Mr Benn.
"These powers will implement the new carbon reduction commitment - a trading scheme for large to medium size companies and public sector organisations.
"This scheme will save four million tonnes of carbon dioxide a year by 2020 and help to spread responsibility for doing something about climate change right across the economy."
Other measures will include, asking the committee on climate change to report on whether the government's target to reduce CO2 emissions by at least 60% by 2050 should be strengthened further.
It will also be asked to look at the implications of including other greenhouse gases and emissions from international aviation and shipping in the UK's targets as part of this review.
The committee will be independent from the government, having its own chief executive and staff, and ministers will be required to seek its advice before amending the 2020 and 2050 targets in the Bill.
However, Caroline Lucas, the Green Party's principal speaker, criticised the government's response to the three month public consultation on the draft Climate Change Bill and its target to reduce CO2 emissions by 60% by 2050.
She said that target was "woefully inadequate and too distant".
"It's criminally irresponsible to adopt a target that not only flies in the face of science," she said.
"Brown is as content as Blair to continue fudging and stalling on cutting on our emissions and so the UK continues to fail on climate change.
"We need a Climate Change Bill which sets binding emissions reduction targets of at least 6% a year to allow us to achieve cuts in UK greenhouse gas emissions in the region of 90% by 2030."
Climate change minister
But Liberal Democrat environment spokesman Chris Huhne gave Mr Benn's announcement a qualified welcome.
He said he was pleased to see that the government was now saying that other greenhouse gases should be included in the UK's emissions targets and not just CO2.
The Environmental Audit Committee, meanwhile, said a Climate Change and Energy secretariat, based in the Cabinet Office, could cut inter-departmental conflict.
Committee chairman, Conservative MP Tim Yeo said: "The UK must be equipped to meet both the challenge of a carbon-constrained world and the likely climate change impacts that will occur.
"It would be disastrous if bad planning policy meant that today's new housing developments become tomorrow's "climate slums," he said.