The bill, which aims to cut emissions by 25 percent, or 145 million tons to 1990 levels by 2020, was drafted by Democrat Speaker Fabian Nunez and Democrat Assemblywoman Fran Pavley.

Pavley also wrote a state law ordering the reduction of emissions from cars and light-duty trucks.

A "Climate Action Team" of environmental advisors also recommended a series of new clean-air programs to Republican Gov. Arnold Schwarzenegger.

"We cannot continue to ignore the threat of global warming to our environment because it isn't just about the future, it's about the impact that it's already having on our public health. It's about the impact that it's already having on our planet, our natural resources," Nunez said at a news conference.

The climate report to Schwarzenegger said the emissions reduction target for 2020 "should be the basis for an emissions cap in the development of the program." The report urged a program beyond California's borders to include other states in the West "to minimize emissions leakage."

It also called for mandatory reporting of emissions levels by the largest polluting industries -- oil and gas exploration and production, oil refining, electric power, cement manufacturing and solid waste landfills.

"Mandatory reporting will ensure an accurate inventory of emissions, which is critical to ensure that decision-making is based on emissions and emission reductions," the report to the governor said.

The climate advisors also said California should develop a "market-based program which considers trading, emissions credits, auction and offsets" and recommend the program to the governor by Jan. 1, 2008.

A cap-and-trade market system would establish financial incentives to reduce emissions. Such programs are used extensively by electricity producers in the European Union.

Another key recommendation would require new electricity in California to come from sources with emissions equivalent to or less than new combined-cycle natural gas-fired plants. All utilities, whether publicly or privately owned, would have to meet state energy efficiency goals.

A spokesman for PG&E Corp.'s Pacific Gas & Electric unit, the state's biggest utility, said the company had not reviewed the Assembly bill and could not comment specifically on an emissions limit.

PG&E spokesman John Nelson said "we are not talking just about greenhouse gases emitted by utilities. This is something that all significant emitters of greenhouse gases need to address and on a regional basis."

The company has been reporting its emissions levels to a state climate registry.

Proponents of a California constitutional amendment that would tax oil production to fund a range of alternative energy efforts "dovetails nicely" with the Assembly's proposed bill, a spokeswoman for the initiative said.

"This dovetails nicely because the goals put forward by the California Climate Action Team are consistent with the goals of the California Clean Energy Initiative," said spokeswoman Fiona Hutton. "Our measure provides the state a funding mechanism to make those goals a reality."

Hutton said that the group will by the end of this month have collected about 1 million signatures, which she said they think will prove to meet the requirement to have about 600,000 signatures from valid voters by April 28.