The G20 group of nations has agreed to end fossil fuel subsidies but made little advance on the key stumbling blocks holding back a global climate treaty.

Leaders of G20 nations meeting in Pittsburgh, hosted by US President Barack Obama, agreed to phase out oil and gas subsidies in the medium term but set no firm timetable to do so. They did however table figures from the International Energy Agency estimating that elimination by 2020 could cut world greenhouse gas emissions by 10 per cent from what they would otherwise be by 2050.

The decision seeks to bring an end to the situation where government energy and climate policy is in conflict in many countries, especially big developing economies and G20 members China and India: Governments are spending taxpayers money to subsidise the development and uptake of renewable energy while at the same time leaving in place $300 billion worldwide in subsidies to make the use of oil and gas more affordable.

"This reform will increase our energy security,” Reuters reports Obama saying at the closing news conference. “It will help us combat the threat posed by climate change. All nations have a responsibility to meet this challenge, and together we have taken a substantial step forward in meeting that responsibility," he said.

Energy and finance ministers will now have to report back to the next G20 summits in 2010 in Canada and South Korea on possible timetables and approaches for withdrawing financial support for fossil fuels.

The G20 leaders have also agreed that it rather than the G8 is now the appropriate international body for economic cooperation. Including as it does the big developing economies, the G20 is well-placed to thrash out the key climate treaty questions, particularly how much developed nations should offer the developing world in financing for low-carbon development and emissions reduction.

There was little progress, however, on this question in Pittsburgh. Finance ministers will be asked to formulate proposals for payments to developing countries to tackle global warming.

On the wider issue of climate negotiations, leaders agreed only to increase efforts to find a deal in the run up to Copenhagen. Reuters quotes European Commission President Jose Manuel Barroso as saying: "I do not hide my concern at the slow rate of progress. Negotiations cannot be an open-ended process."