"A central element as we see it, is energy diversity -- being able to offer consumers vehicles that can be powered by many different energy sources and advanced propulsion systems to help displace petroleum and reduce greenhouse gas emissions," Rick Wagoner, chairman and chief executive of General Motors, said in a statement.

GM said setting laws to cap smokestack emissions of stationary sources, such as refineries and heavy industry, has proven easier than those capping tailpipe emissions from vehicles, which are smaller and more numerous.

The European Union's carbon market and the US Northeastern states' Regional Greenhouse Gas Initiative have concentrated first on smokestack emissions.

Several of the emissions bills in US Congress seek to cap emissions on an economy-wide basis, while others focus solely on stationary sources.

US President George W. Bush says mandatory caps on greenhouse gases would hurt the economy and drive jobs to rapidly developing countries that do not have emissions regulations.

He supports millions of dollars in incentives for what he calls low-carbon ethanol made from corn and new sources like switchgrass and poplar trees.

GM said it is expanding development of electrically driven vehicles, including hybrids, plug-in hybrids, and fuel cells. The company said the approach is a more effective solution than the government's Corporate Average Fuel Economy program that over three decades "has fallen dramatically short of its stated goals."

US CAP has received some criticism for calling for emissions allocations to be given free at first to the sources of the gases. Critics say an auction of greenhouse gas allocations could create a less volatile market where demand was spread more evenly across sources.

Over the last several weeks several other companies including insurance group AIG, Alcan, Dow Chemical, Deere & Co. , Johnson & Johnson, PepsiCo and Shell have joined US CAP.