Since a bipartisan proposal to cap greenhouse gases was defeated in the Senate two years ago, more evidence has accumulated that climate change is a serious problem and that human activity is at least partly responsible. More important to Washington policy-makers, a growing list of business leaders is calling for regulation of emissions of greenhouse gases, namely carbon dioxide.

Sens. John McCain, an Arizona Republican, and Joe Lieberman, a Connecticut Democrat, last week reintroduced their climate-change bill. As evidence of the growing awareness of the dangers of climate change and the need to do something about it, there will be competing bills in Congress this year. The McCain-Lieberman proposal, which received 43 votes, including Maine’s senators, in the Senate in 2003, still remains the best, despite objections over funding for nuclear energy, a provision added to gain support for the bill. It should continue to be supported by Sens. Olympia Snowe and Susan Collins.

The Climate Stewardship and Innovation Act would limit greenhouse gas emissions from all major sectors of the economy to 2000 levels by 2010. To achieve these levels it would adopt a cap-and-trade system similar to the one that has worked effectively to reduce acid rain. New this year are financial incentives to encourage companies to invest in energy-efficient technologies and for research and development of cleaner fuels and vehicles. Because nuclear power, which does not emit greenhouse gases, holds more promise for delivering a lot of energy than, say solar or wind, it is expected to collect more of the subsidies.

Disposing of nuclear waste remains a problem but countries like France, which gets three-quarters of its electricity from nuclear plants, have found solutions. In addition to burying waste, some is reprocessed to recover plutonium, which can be used as reactor fuel.

The mix of emissions caps, trading and incentives for innovation has worked well in England, according to British financiers and business representatives who attended a seminar in Maine this spring. In Britain, businesses understand that reducing energy consumption not only reduced greenhouse gas emissions, but also saves them money, said Rhian Chilcott of the Confederation of British Industry.

American businesses are coming to the same realization. Executives from energy and other companies are increasingly calling for federal government action on climate change, including regulations on carbon emissions. They want such rules for consistency’s sake – a patchwork of state and local rules are difficult to follow – and because they foresee increased costs if temperatures rise and weather worsens.

McCain-Lieberman should attract both environmentalists and capitalists: The market-driven incentives in this act steer polluters into a cap-and-trade system that rewards efficiency and encourages smart business investments.

This is a sensible approach the United States should adopt.