The Republican-authored compromise would weaken a Democratic plan to require companies that emit more than 10,000 metric tons of carbon annually to register their output with the government.The carbon emissions reporting would be part of a broad energy bill, which the Senate hopes to complete this week.
The United States is the world's largest emitter of so-called greenhouse gases. Most are produced by utilities and industrial plants.
An amendment offered on Earth Day by Kansas Republican Sen. Sam Brownback called for voluntary reporting for five years, with a switch to mandatory reporting if the registry fails to capture at least 60 percent of U.S. emissions.
Sen. Harry Reid of Nevada, the Senate's majority whip, praised the compromise version as "a sound approach."
Two other Republicans, George Voinovich of Ohio and Chuck Hagel of Nebraska, have also introduced a bill to make emissions reporting voluntary, which is preferred by industry.
However, the fate of any emissions reporting legislation remains unclear. The Republican-led House of Representatives did not include mandatory reporting in its energy bill, passed last summer.
Carbon emissions from power plants and factories have been linked to global warming, which scientists warn could lead to massive flooding and rising ocean levels.
California Democrat Dianne Feinstein criticized the current energy bill for lacking any "substantive" provisions to limit carbon dioxide, and touted the danger of global warming.
"This may seem like small change, but just a few upticks in temperature can produce catastrophic changes in weather," Feinstein said. "The window to do something about global warming is closing fast."
The White House opposes mandatory reporting requirements, echoing the views of the utility and energy industry which says mandatory reporting would open the door to eventual limits on carbon dioxide emissions.
A year ago, the Bush administration announced the United States would not participate in the Kyoto Treaty, an international attempt to limit greenhouse gases by industrial countries. President George W. Bush said the proposed reduction in U.S. emissions by about 5.2 percent of 1990 levels during 2008-2012 would be too costly to the American economy.
A better approach, Bush said earlier this year, is to encourage companies to voluntarily reduce harmful emissions.
The "Clear Skies" initiative calls for utilities to cut emissions of three major pollutants - not including carbon dioxide - by 70 percent by 2018 using a cap-and-trade system.