Setting the tone for the meeting of leaders of G-8 nations and the G-5 in Heiligendamm, a seaside resort near Berlin, Prime Minister Manmohan Singh [Images] made it clear that primacy has to be given to development and there could be no compromise on it.

Doing some plain speaking, Singh contended that no efforts at mitigation of greenhouse gas emissions would succeed if patterns of production and consumption in developed countries remained grossly unsustainable.

He also told the leaders from the US, Russia [Images], Britain and other industrialised nations that the success of the carbon market was critically dependant on the level of GHG abatement commitments by the developed countries.

India has stressed that imperfections in the Clean Development Mechanism, which contributed to high transaction costs, needed to be addressed.

The G-5 said access to adequate technology is a key condition to enable developing countries to contribute to the efforts to address climate change.

"We need an agreement on transfer of technologies at affordable costs for accelerated mitigation efforts in developing countries," said the group, which also includes China, Brazil [Images], South Africa and Mexico.

It noted that climate change was a global challenge with strong economic, environmental and social dimensions and asked the developed countries to take the lead in fulfilling their commitments under the UN Framework Convention on Climate Change.

A joint statement issued after the G-8 and G-5 meeting noted that adaptation to climate change would be a major challenge for all countries, in particular for developing countries.

They agreed that means for adaptation need to be included in a future agreement along with enhanced technology cooperation and financing.

The leaders recognised the need for "...closer, more practical and result-oriented regional and international cooperation in the energy sector, especially in ensuring secure and affordable supplies of energy as well as in improving energy efficiency."

They agreed to embark on a "high-level dialogue" on specific challenges in a structured manner for a period of two years until the G-8 Summit in 2009.

The leaders agreed to work together to promote more favourable conditions for investment, both domestic and foreign, to foster economic growth and sustainable development.

On its part, the G-5 emphasised that early and significant commitments by the developed countries would give a long term and strong signal to the private sector, including in its involvement in climate-related investments, and spur the carbon market.

The discussions between the G-8 and G-5 leaders marked an "important step" towards an "equal and enduring" partnership for building the framework conditions of a globalised and competitive world economy, the statement said.

"In a globalising world, we have to look beyond national and regional boundaries and work together," it said.