Speaking after talks with her Australian counterpart John Howard, Clark said the leaders had discussed each other's efforts to combat climate change.

"We've agreed that we should work hard on seeing if we can get the schemes we are designing to be compatible schemes," Clark told a joint press conference in Sydney.

"At this stage of designing systems we should certainly be comparing notes on verification systems, on forms of measurement and so on."

Clark said Howard had placed climate change at the head of the agenda for the APEC summit to be held in Sydney in September.

She said while some of the Asia-Pacific Economic Cooperation economies were not interested in a carbon trading scheme, New Zealand and Australia's models could encourage others to cap harmful greenhouse gas emissions.

"I think there will certainly be interest from a number of countries in the sort of things that we're doing and if we can get it right that sets a model for others as well," she said.

Howard said that officials from both countries would work to ensure systems were as compatible as possible.

"Clearly, we have taken some different approaches to aspects of climate change in the past, but both of us see the merit in our respective countries of developing emissions trading systems and there is no reason why we can't pool our experiences," Howard said.

Howard, previously a climate change sceptic, earlier this month announced the government would develop a scheme to set a cap on emissions and grant businesses permits to cover the amount of greenhouse gases they produce.

The permits could be traded between businesses, allowing companies that are not using all their allocation to sell them to those that will exceed their quota.

New Zealand announced in May it will set up a greenhouse gas emission trading scheme by the middle of 2008 in its quest to become a carbon-neutral nation.

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