"I'm under no illusion that there is a long road ahead," Merkel said about efforts to reverse global warming, melting ice caps and rising seas.

But she warned at a climate conference in Berlin that "doing nothing only means that it will get a whole lot more expensive."

Merkel was speaking at the Petersberg Climate Dialogue, which groups ministers and representatives from 35 countries responsible for 80 percent of world carbon emissions, ahead of a world climate summit later this year in Warsaw.

The centre-right leader said Germany and the European Union want to keep taking the lead against climate change but warned that they cannot do it alone.

Industrialised nations must substantially cut carbon emissions and support developing countries with innovative technologies enabling them to take part in the campaign while continuing to grow economically, she said.

Merkel said an overhaul was needed in the trade in right-to-pollute emission certificates that have become so cheap amid the eurozone crisis that burning coal has become more lucrative again.

The German leader conceded that her own coalition government remains divided on whether market intervention is needed in the European trade in emission certificates.

Ironically, Germany's carbon emissions have also risen amid its shift from nuclear toward renewable energy sources, with fossil fuels occasionally making up shortfalls.

Despite its greater share of wind and solar power, Germany's CO2 emissions rose by two percent last year, the first increase in years.

The international community plans to reach a binding agreement by 2015 on carbon goals set to take force by 2020, with the aim of limiting global warming to no more than two degrees Celsius.

Merkel warned that a worldwide deal must stand by 2015, when Paris will host a UN climate summit, and that waiting and doing nothing "is not an option".