Global business leaders added momentum to prospects for a new United Nations climate treaty by agreeing yesterday that the world must cut greenhouse gas emissions in half by mid-century by setting specific limits on carbon.

Government officials reported little progress in setting such limits, however, showing how distant a new treaty remains.

Some 500 CEOs and other top business experts said at the conclusion of the three-day World Business Summit on Climate Change in Denmark that "immediate and substantial" emissions cuts were needed by 2020, followed by cuts of at least 50 per cent of 1990 levels by 2050. They said governments should use the marketplace to set a global price on carbon instead of taxing it, according to a statement from conference organisers.

Under cap-and-trade, the government establishes a market for carbon dioxide by selling credits to companies that emit greenhouse gases. The companies can then invest in technologies to reduce emissions to reach a certain target or buy credits from other companies that already have met their emission reduction goals.