Germany has announced a £48 billion carbon cutting package to reduce its emmissions by 55% over the next decade.
Chancellor Angela Merkel - under pressure from environment protests, strikes and a surge in support for the rival Green Party - believes the deal represents a major boost to reduce the emissions of Europe's economic powerhouse.
The reduction in emissions will see the central European nation emitting the same amount of carbon as it did in the 1990s.
"We believe that we can achieve the goals and that we’ve truly laid the foundations for this," Mrs Merkel announced.
The announcement comes as more than 500 climate protests were held across Germany in what is thought to be thelargest climate protests in history.
How is Germany planning to reduce its emissions and what opposition is there?
Among the measures is a charge for carbon emissions from transport and heating fuels.
The government plans to introduce a national emissions trading system that will see prices for a ton of carbon dioxide, the main greenhouse gas, start at 10 euros (£8.80) in 2021, rising to 35 euros (£30.90) in 2025.
Experts had earlier said that a starting price of 35 euros was necessary to ensure emissions drop soon.
But German manufacturers - including the country’s powerful car makers - have lobbied against high carbon prices and urged the government to instead support the development of climate-friendly technology.
Other measures agreed include raising the climate charge on airline tickets and investing more in low-emission rail travel, including by reducing the tax on train tickets.
Germany had long been a leader on environmental protection but has lagged behind many European neighbours in recent years and looks set to miss its emissions-cutting targets for 2020 by a wide margin.
The country’s transport sector in particular had failed to keep step with reduction targets.
The government’s cautious climate policy contrasts with the view among most voters that curbing global warming is the most pressing issue of the day.