Ministers from members of the Asia Pacific Economic Cooperation forum - known as APEC - have decided at a meeting in Australia that development of clean energy technologies should take priority over a carbon-trading system. The conference being held in the northern city of Darwin will help officials set the agenda for an APEC leaders' summit in Sydney later this year. From Sydney, Phil Mercer reports.

A handout picture shows the towers in what part of the world's biggest solar power plant will look like to be located near Mildura in the north-east of the Australian state of Victoria (October 2006)

Climate change will be a key issue at September's APEC summit, which will bring together leaders of some of the world's largest economies - and some of the worst polluters.

At a meeting in Darwin Wednesday, APEC energy ministers decided that developing clean technologies to reduce greenhouse gas emissions is more important to the world's climate at this stage than a so-called carbon-trading system.

Carbon trading sets limits, for both companies and whole countries, on emissions of carbon dioxide, one of the key greenhouse gases thought to be contributing to climate change. The system also puts a price on carbon emissions, providing a financial incentive for firms to clean up pollution: if they have leftover emission allocation, they can sell it to others like a commodity.

U.S. representatives, however, argued that such a system would be difficult to introduce given the vastly different circumstances among APEC's 21 members, which include the U.S., China, Japan, and a host of smaller economies from Asia and Latin America.

Australian Industry Minister Ian MacFarlane says cleaning up coal-fired power stations, which accounts for most power generation in Australia, is a priority.

"We need to develop and adopt a mix of cleaner stationary power generation technology and energy efficiency and conservation," he said.

The energy ministers' meeting in Darwin is one of a series held by APEC officials that will set the agenda for the September summit in Sydney.

The Australian government is planning a major advertising campaign to boost it environmental credentials ahead of national elections later this year.

Australia, like the U.S., has refused to sign the Kyoto Protocol on climate change, which sets national limits on carbon emissions. Canberra has insisted that ratifying the treaty would damage the country's coal-driven economy - but insists that Australia is still meeting its international environmental obligations.

Australia nevertheless is one of the worst polluters in the developed world. A recent study showed that its greenhouse emissions have been rising far faster than the global average.