The Kyoto Protocol is now in effect, requiring 141 signatory nations to combat global climate change by reducing their carbon dioxide emissions. The United States is not among them, of course, because President Bush and most congressional Republicans rejected the idea of slapping any kind of mandatory CO₂ controls on U.S. companies.

By all appearances, neither the president nor GOP leaders are going to bend on this issue. They contend that any curbs on CO₂ emissions, whether through Kyoto or legislation, would impose burdensome costs on U.S. companies and lead to massive job loss. Sen. James M. Inhofe, R-Okla., goes even further, calling the notion that CO₂ emissions contribute to global warming “the greatest hoax ever perpetrated on the American people.”

But beyond Washington, in the boardrooms of utility companies, automakers and institutional investors, there is an increasing sense that it’s no longer a matter of whether corporate America will face mandatory limits on carbon dioxide emissions, but when. Prediction: It will happen before the end of the decade, if not sooner.

Congress and the White House will be pressured to act by a powerful and persuasive interest group: corporate America. The reason, quite simply, is that the only thing companies hate more than being regulated by the federal government is being regulated by 50 state governments.

To be sure, today most of the nation’s leading power companies, automakers and their lobbying groups, led by the National Association of Manufacturers, remain dead set against federal CO₂ caps. But a growing number of them are gradually rethinking their positions — and some already are calling on Congress to set federal rules for greenhouse gas emissions.

We’ve seen this movie before. Thirty-five years ago, power plants and automakers faced an overwhelming mishmash of state smog-control rules. A Fortune survey in 1970 found that after years fighting the states, 57 percent of big-company executives surveyed wanted Congress to pass uniform (read: more lenient) federal standards. President Richard M. Nixon, who knew which way the wind was blowing, used his 1970 State of the Union address to call on the world to join him in curbing pollution, saying “restoring nature to its natural state is a cause beyond party and beyond factions.” The result was the first Clean Air Act and the Environmental Protection Agency (EPA).

States today are similarly on the march to curb carbon dioxide output. California, as in the 1960s, is taking the lead, with a plan to require automakers to cut greenhouse gas emissions in all new car models starting in 2009, with 30-percent reductions by 2016. Seven other states in the Northeast plan to adopt the same requirements.

Then there are the lawsuits. In April, a federal judge will hear a suit by attorneys general from 12 states attempting to reverse an EPA ruling that carbon dioxide doesn’t count as a pollutant that can be regulated under the Clean Air Act (10 other states filed in support of the EPA). And five of the nation’s largest utilities, accounting for 25 percent of the CO₂ emissions in their industry, face a suit by eight states and New York City calling on them to cut greenhouse gas emissions by 3 percent a year for the next decade.

States are also getting together to create mini-Kyoto accords in their regions. Nine states in the Northeast and Mid-Atlantic, along with five Eastern Canadian provinces, plan to launch a regional CO₂ cap-and-trade program (in which companies that exceed targeted reductions sell credits to those who don’t) by April. And Louisiana power company Entergy Corp. even recently began paying a Mississippi oil company not to release carbon dioxide, to show Congress that a cap-and-trade CO₂ market can work.

Honda Motor Co. is the first automaker to cry uncle. In recent weeks it made two seemingly contradictory announcements: Honda would join in a lawsuit to stop California’s new emissions standards, but it also called on Congress to impose national standards on those same emissions. Power plants aren’t far behind. Last week, the trade publication Public Utilities Fortnightly concluded that “a growing number of U.S. utility companies have come out in favor of federal mandatory limits on emissions of carbon dioxide from their facilities.”

Shareholders are now pressuring companies to examine how much liability exposure they face amid all this uncertainty. To address investor concerns, Cinergy Corp. and American Electric Power, two of the biggest coal-burning utilities, embarked last year on additional efforts to cut CO₂ emissions.

“Currently, coal-fired generation faces a myriad of overlapping and conflicting environmental rules and regulations, each with its own deadlines, requirements and goals,” Cinergy says on its Web site. “This ‘death by a thousand cuts’ regulatory policy unnecessarily drives up compliance costs and defies rational business planning.”

Cinergy goes on to say it supports uniform federal standards for the reduction of the three pollutants the Bush administration would limit in its “Clear Skies” plan now before Congress. But Cinergy doesn’t mention carbon dioxide emissions. Yet.

Mike Mills is CQ’s executive editor for electronic publishing. Next week: Courts & the Law, by Kenneth Jost.