Australia and China have agreed to intensify their collaboration on creating low carbon cities to combat global climate change.

The agreement was reached this week in Canberra during the third Australia-China Ministerial Dialogue on Climate Change between Greg Combet, Australia's minister for climate change and energy efficiency, and Xie Zhenhua, China's National Development and Reform Commission vice chairman, a former environment minister.

The city of Shenzhen, China is one of the eight cities developing low carbon plans. [Environment news service]

"The central theme of our discussions was how we can drive the development of our economies as the world moves to a low-carbon future," said Minister Combet.

"I was particularly interested to hear from Vice Chairman Xie about the priority China is giving to low carbon energy, energy efficiency and clean technology under the latest Five-Year Plan," he said.

Australia is the world's highest per capita emitter of greenhouse gases, while China is the world's overall largest greenhouse gas emitter.

Under a pilot program that began last summer, five Chinese provinces and eight cities are developing low carbon plans, including the use of market mechanisms to achieve emissions reductions.

"To assist this, we agreed today to intensify cooperation in developing low carbon cities, and to share experience on market mechanisms, including emissions trading and a carbon price," Combet said.

"Both countries also agreed to continue co-operation on carbon pollution measurement and reporting, as well as strengthen energy efficiency collaboration.

"We also exchanged views on the outlook for UN climate change negotiations. China, as the world's largest emitter, is a key player in these negotiations," Combet said.

"I highlighted Australia's focus this year is on implementing the agreements reached at Cancun last December," Combet said.

Xie said the Cancun Agreement moved the international negotiation process "a big step forward."

In this year's climate talks in South Africa, Xie said China will "stick to the principle of no gap between the first and second phases of Kyoto Protocol," which expires at the end of 2012.

"We should set up the mechanisms for adaptation, finance and technology," he said.

In a speech at Australian National University in Canberra on Wednesday, Combet and Xie addressed the inaugural meeting of the Australia-China Climate Change Forum, which is building stronger research and policy links between China and Australia on climate change.

"As the developed world's highest per capita emitter, it is in Australia's national interest to reduce our carbon pollution, and access the opportunities that come from moving to a clean energy future, said Combet. "That's why the Gillard government has made clear our commitment to introduce a carbon price into the Australian economy from 1 July 2012."