The UN's climate change conference in Bali was hailed as a "huge step forward" over the weekend after an eleventh hour compromise deal saw both developed and developing countries sign up to a roadmap for achieving a global climate agreement by the end of 2009.

The Environment Secretary, Hilary Benn, said the deal represented "an historic breakthrough" that for the first time saw all the world's nations agreeing to negotiate a deal to tackle dangerous climate change.

"We came here saying we wanted a roadmap that included every country and covered emission reductions from developed countries and fair and equitable contributions from developing countries," he said. "We leave here with all of this and more – a groundbreaking agreement on deforestation, and others on adaptation and technology."

Yvo de Boer, head of the UN Climate Change Secretariat, who broke down at one point during the marathon negotiations when it appeared a deal was slipping away, agreed the talks had proved successful.

"All three things I wanted have come out of these talks – launch, agenda, end date," he told reporters.

Under the agreement, delegates agreed to a timetable for negotiations over the next two years which is scheduled to culminate in a full agreement being reached at the UN's conference in Copenhagen in late 2009.

The final agreement also recognises the need for "deep cuts in global emissions" and calls for a "long-term goal for emissions reductions".

Consensus was only reached following a last minute U-turn from the US, which had been resisting calls from developing nations for greater technological and financial help to combat the issue.

David Symons, director of corporate services at green consultancy WSP Environmental, advised firms to keep a close eye on negotiations as they proceed over the next two years.

"Businesses will need to look at the roadmap systematically," he said. " There will be four main areas for discussion – adaptation, reducing green house gases, promoting climate friendly technology and how it is all financed – businesses need to look at each of those areas and look at how they will impact them."

He added that there were plenty of reasons to be optimistic that a final agreement could be reached by 2009.

"One of the key considerations is that there will be a new US president by then and all the presidential candidates seem a much deeper shade of green than the current administration," he said.

Meanwhile, the current US administration has already expressed "serious concerns" about the final agreement. White House press secretary, Dana Perino, warned that China and India would also have to agree to deep emissions cuts if the US is to continue to support the negotiations.

The final agreement divided environmentalists and green business groups.

Several environmental business and investment groups, including Prince Charles' Corporate Leaders Group on Climate Change and the Institutional Investors Group on Climate Change, had called for binding emission reduction targets to be included as part of the agreement.

But EU-backed proposals for cuts in rich countries emissions of between 25 and 40 per cent were rejected by the US and several other developed countries on the grounds that targets would "pre-judge" the results of future negotiations. A compromise draft agreement stating that global emissions should peak within the next 10 to 15 years and then be cut by half by 2050 was also rejected, leaving only the vague commitment to "deep cuts".

Adam Nathan, director of communications for the Carbon Markets Association (CMA), welcomed the agreement but warned that binding emission targets would be required in the final treaty.

"The process to 2009 should at a minimum deliver an extension of the first phase binding commitments beyond 2012 as well the engagement of a broader group of nations with binding commitments," he said. "Long-term credible and binding commitments covering all major emitters are ultimately essential to deliver the massive investments required in emissions abatement."

However, there was considerable progress on other aspects of the post-2012 framework with delegates agreeing to a new work programme designed to accelerate and scale up investment in mitigation and adaptation technologies, and new rules on the governance on the UN's Adaptation Fund for poorer countries attempting to cope with climate change.

There was also good news for the global carbon market after an agreement was reached to reform the management of the UN's Clean Development Mechanism (CDM) carbon trading programme and abolish registration fees and levies on projects in the poorest countries.

The CDM has been heavily criticised for imposing expensive registration fees on carbon reduction projects, making it uneconomical for smaller projects in developing economies to join the scheme and sell credits into the carbon market.

Under the new proposals, fees will be abolished in the least developed countries and carbon reduction projects based on non-renewable biomass, such as initiatives to provide communities that use open fires for cooking with more efficient cooking stoves, will be allowed to enter the scheme and sell carbon credits.

The final agreement also included a new commitment to address tropical deforestation through a new Reducing Emissions from Deforestation and Degradation (REDD) initiative that could see governments offered financial incentives to tackle tropical deforestation and forestry projects incorporated into the global carbon market.

"A strong, well-funded REDD mechanism will enable tropical forest countries to develop their economies without destroying their forests," said Rodney Taylor, director of WWF's Global Forest Programme. "In doing so, they will make a real contribution to mitigating global climate change."