The meeting's chairman, Australian Treasurer Peter Costello, hailed the agreement at the conclusion of a two-day G20 in Melbourne as a breakthrough that could reduce future potential for geo-political tensions.

He said if emerging giant economies could not be guaranteed access to the energy and minerals they need, "the friction between nations will be quite severe," Costello told reporters.

The G20 said in a communique issued after the meeting that energy supplies had struggled to keep pace with demand growth, resulting in significant price increases.

"We agreed that enhancing global trade by strengthening markets and ensuring sustainability by promoting investment and encouraging efficiency are the best ways to deliver lasting resource security," it said.

Costello said the meeting agreed that market-based mechanisms were the best way to handle energy security as they minimised the risk of market-distorting activities such as trading cartels.

The Australian Treasurer had said before the meeting that climate change would be a major part of the agenda, including discussion on market mechanisms to reduce emissions, such as carbon trading.

But South African Finance Minister Trevor Manuel said the economists had decided climate change was beyond their remit and decided to leave the issue to environment ministers.

"I know ahead of this meeting there was hope expressed that we could devote at least a day or so to issues of climate change," he said.

"We don't need to be convinced about the importance of the recent data but we think that our colleagues dealing with environmental issues are probably better placed to advise us on our ongoing work."

The recent Stern report, commissioned by the British government, warned climate change could cost some countries between five and 20 percent of their economic output.

Costello said during the meeting that emerging economies did not feel their development should be hamstrung by environmental restrictions that were not in place when the world's richest countries were undergoing industrialisation.

"I think some of the developing countries feel they are going through a process of industrialisation. That is going to bring huge energy demand and they feel that emissions caps will make that energy more expensive.

"In fact some say emission caps will hurt the poor," he said The lack of any concrete recommendations follows comments by International Monetary Fund managing director Rodrigo Rato on Saturday that action was vital.

"This is not a matter of faith, there is certainly climate change and the link between greenhouse emissions and changes in temperatures is known," he said ahead of the opening of the summit.

Later Saturday, he said the international community had to come together to find ways to limit emissions of greenhouse gases that are both fair and economically efficient.

"Specifically, I believe that a successor to the Kyoto agreement, making use of either an emissions trading scheme or a tax scheme for greenhouse gases, will be necessary."

On Friday, a UN conference on climate change in Kenya decided negotiations for a review of the Kyoto pact, with new pledges for cutting greenhouse gases, would be launched in 2008.

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