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The eleventh-hour deal thrashed out at the UN climate change summit in Cancun exceeded expectations, the Commons has heard.
Energy and climate change secretary Chris Huhne told MPs the agreement reached at Cancun is a "solid foundation" for future progress on tackling climate change.
Opening a statement on the outcome of the conference, Huhne said the deal was a "significant step forward" but more work was needed before next year's summit in South Africa.
He said that after the "disappointment" of last year's meeting in Denmark "expectations for the Cancun conference were not high".
Huhne told the Commons that expectations were "not just met, but exceeded".
The energy secretary said that the conference agreed a "series of linked decisions under both its tracks: the Kyoto protocol and the framework for reaching a new and more comprehensive agreement."
Huhne also said that the conference "adopted decisions to develop systems for measuring, reporting and verifying emission reductions and actions in line with countries' commitments".
The conference also agreed the establishment of a green climate fund to support policies and activities in developing countries.
Huhne said that "the fund will be governed by a board with equal representation from developed and developing countries, and its finances will be managed in the first instance by the World Bank."
Although Huhne said that the conference did not settle the future of the Kyoto protocol or adopt a new and more comprehensive treaty incorporating all countries, he said that the agreements reached represented a "very significant step forward".
Shadow energy secretary, Meg Hillier, agreed that the agreements reached were an "important step in the right direction."
She welcomed the establishment of the climate fund, and the acknowledgement of "the gap between the promised emission cuts and the cuts that the science tell us are necessary."
Hillier said: "International progress on tackling climate change is of the utmost importance to us all."
The "statement of intent" from Cancun would hopefully "pave the way for more ambitious aims in South Africa next year," she said.
Responding, Huhne acknowledged the difficulties for some European countries with poor economies to move towards substantial emissions reduction but said that the process was "under way."
Martin Horwood (Lib Dem, Cheltenham) spoke of the risk that in 2012 the planet will remain "unprotected by any continuing international agreement."
Barry Gardiner (Lab, Brent North) asked why any developing countries should believe that climate finance will arrive when in previous years "the money did not come."
Neil Carmichael (Con, Stroud) wished for China and India to "co-operate more fully with the targets on carbon dioxide reduction."
Chair of the environmental audit committee, Joan Walley (Lab, Stoke-on-Trent North), questioned if the UN procedures on climate change were fit for purpose.
Andrew George (Lib Dem, St Ives) asked what proportion of the funds going into the green climate fund "will be sourced from existing budgets that are currently available to the Department for International Development."
Huhne said £2.9mwould be withdrawn from the UK's aid's budget and this was set to rise to 0.7 per cent of gross national income (GNI) by 2013.
Graham Stringer (Lab, Blackley and Broughton) asked about the knock on effects on domestic energy prices.
Duncan Hames (Lib Dem, Chippenham) asked how the secretary of state intended to "broker international consensus on which of the options for climate finance may be taken forward."
Shadow environment minister, William Bain (Lab, Glasgow North East) commented on the REDD agreement.
Former climate change minister, Joan Ruddock (Lab, Lewisham Deptford) said that individual European countries could afford to take a second Kyoto commitment period and commented that "the EU could raise its emissions reduction target to 30 per cent at very little extra cost."
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