Steelmakers concerned about the fallout from proposed cap-and-trade legislation can breathe a temporary sigh of relief as the proposed law will probably not be enacted this year, sources said.

The impact of the recession, upcoming elections and the debated validity of climate-change claims have all worked against the initiative. And major corporations and U.S. states are now withdrawing their support for various climate initiatives.

"The whole issue of cap and trade has collapsed," said Paul Chesser, director of Climate Strategies Watch for the Chicago-based Heartland Institute. "With the upcoming elections, the recent 'Climategate' stuff and all the errors that bloggers in Britain are identifying on the issue, cap and trade is dead."

BP America Inc., Caterpillar Inc. and ConocoPhillips Co. have all decided not to renew their membership in the U.S. Climate Action Partnership (USCAP), a Washington...