Nobuo Tanaka, executive director of the Paris-based IEA which advises 28 industrialized nations on their energy policy, said Washington's 2020 target of cutting carbon emissions by 17 percent from 2005 levels meant it would have to adopt new legislation imposing a cost on carbon waste.

Tanaka said the U.S. Senate needed to pass an energy bill, already given initial approval by the House of Representatives, which would allow a cap-and-trade system to set limits on greenhouse gas emissions and allow companies to trade permits.

"To really achieve these (emission) targets, the U.S. certainly has to introduce carbon prices either by cap-and-trade or carbon tax," Tanaka told Reuters.

"The Senate must pass this comprehensive energy and climate bill otherwise it cannot design a cap and trade system."