Breath of fresh air from EU
The agreement involves a 20 per cent cut in carbon emission by 2020. But there have been concessions to countries in Eastern Europe, worried that the costly measures could cripple their already-fragile economies.
French president Nicolas Sarkozy, who pushed for the deal, has described it as historic.
He has called on other countries, including the USA and China, to follow suit in committing to cuts in carbon emissions.
To clinch the deal, France proposed giving some breathing space to countries dependent on coal and oil for power generation. However, the summit said that this should be temporary.
Earlier in the day, the leaders agreed on a 200 billion euro package to ward off recession in member states.
The Lisbon Treaty, billed Europe's new rule-book was also high on the agenda.
The document was stalled after Irish voters rejected it in June. But the summit agreed on concessions to Ireland, paving the way for a new vote by October.