Two Democrats in the U.S. Senate on Wednesday unveiled climate legislation that aims to drastically cut greenhouse-gas emissions beginning in 2012, starting an effort that threatens to divide the party amid opposition from coal, manufacturing, and oil interests.

With the American flag as a backdrop, U.S. Senate Environment and Public Works Committee Chairman Barbara Boxer, D-Calif., and Senate Foreign Relations Committee Chairman John Kerry, D-Mass., outlined the measure, which would cut emissions 2005 levels 20% by 2020 and more than 80% by 2050.

"This bill addresses the major challenges of our generation," Boxer told the crowd of environmentalists on the East Lawn of the U.S. Capitol. She said the measure aims to address concerns in some regions that local economies would be harmed, and that "clean energy" would help create jobs.

Democrats are hoping to act to combat global warming, which scientists have linked to more intense weather events such as drought in some places and rising sea levels in others. A small minority, including Sen. James Inhofe, R-Okla., says there is no scientific evidence of such a threat.

Utilities, which account for a big chunk of U.S. greenhouse-gas emissions, sent representatives out in a show of support. Public Service Enterprise Group (PEG) Chairman Ralph Izzo showed up and through a statement said that the bill is "an important step in the right direction."

Among the energy sources that the Senate hopes to give an advantage to is natural gas. In an effort to reach Republicans, the goal is also to encourage nuclear power. And, in hopes of safeguarding against spikes in costs for emitting carbon dioxide, the bill includes mechanisms to limit emission-allowance prices through a so-called soft collar.

One sign that efforts to reach other lawmakers may be paying off: softening opposition from some quarters. Asked about reports the Senate climate change bill would reserve 20-25% of revenues raised to pay down the federal budget deficit, Senate Budget Chairman Kent Conrad, D-N.D., said "I like that a lot, I like that a lot."

Conrad wouldn't say whether that measure would be enough for him to set aside his skepticism over the legislation and support it, but he reiterated "I would say that I like that piece."

-Siobhan Hughes, Dow Jones Newswires, siobhan.hughes@dowjones.com, 202-862-6654