The agreement emphasizes that the U.N. Framework Convention on Climate Change and its Kyoto Protocol are the most appropriate framework for addressing climate change.
According to a release, the pact would strengthen cooperation between the two countries on mitigation, programs, projects, technology development and demonstrations relating to reducing greenhouse gas emissions.
The areas of cooperation would include energy conservation efficiency, renewable energies, clean coal, methane recovery and utilization, afforestation and sustainable management of forests and ecosystems, transportation and a sustainable habitat, it said.
The pact signifies the determination of the two countries to enhance dialogue, communication and "pragmatic bilateral cooperation" in addressing climate change. Signed by Indian and Chinese environment ministers Jairam Ramesh and Xie Zhenhua, respectively, it is the first such agreement between the two countries.
There is virtually no difference between the Indian and Chinese "negotiating positions" on international climate treaties, Ramesh said shortly before the agreement was signed, India's Economic Times reported. India and China both have both been part of the Group of 77 countries regarding climate negotiations. Ramesh's comments put to rest speculation that India was considering moving out of this grouping, the Times noted.
The agreement comes ahead of the December U.N. climate change summit in Copenhagen, Denmark, in which world leaders will attempt to strike a new global climate treaty to replace the Kyoto Protocol, which expires in 2012.
Both India and China have rejected calls from rich countries to set binding caps on their carbon emissions.
Ramesh said he would hold more discussions with Xie to determine what the two countries can do "to ensure a successful outcome at Copenhagen that not only protects the environment but promotes the interests of developing countries," the Times reports.
China, the world's biggest emitter of greenhouse gases, accounts for more than 20 percent of all global emissions. While India accounts for less than 5 percent of the world's emissions, it is the fourth biggest emitter behind China, the United States and Russia.
As part of the agreement, the two countries have agreed to establish the India-China Partnership on Combating Climate Change in which they will hold ministerial consultations and conduct a regular exchange of views.
Also on Wednesday, Chinese President Hu Jintao and U.S. President Barack Obama discussed the climate change issue during a phone call, China's state-run Xinhua news agency reported. During the phone conversation, the Chinese president said a climate deal had to include the terms covered by the Kyoto Protocol. "Although problems remain in talks for a final deal, there are hopes for a positive result at the Copenhagen Conference as long as the convening parties work together closely," Hu said, Xinhua reports.
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