New Zealand has led a coalition of governments urging an end to fossil fuel subsidies.

Photo: 123RF

The memorandum, signed by Costa Rica, Denmark, Ethiopia, Finland, Norway, Sweden and Switzerland as well as New Zealand, has been presented in Washington as part of the lead-up to a major climate conference in Paris in December.

The 196 nations at the conference will be working on a fresh agreement to reduce carbon emissions - the first major deal on the matter since Kyoto.

Today's memorandum calls for the elimination of inefficient fossil fuel subsidies, citing environmental, economic and social grounds, and has the full support of the United States and France.

Climate Change Minister Tim Groser said the end of subsidies was the missing piece in the climate change jigsaw with more than a third of global carbon emissions between 1980 and 2010 believed to be driven by subsidies.

He said keeping prices artificially low encouraged wasteful fuel consumption and discouraged the development of new, greener technologies.

Prime Minister John Key has welcomed the agreement saying the memorandum was significant.

"It's one thing to have actually a price on emissions, like New Zealand has through our ETS, but some countries actually are going the other way, they're actually subsidising those fossil fuels, our argument is that if they were made to pay the real price it would have some impact on demand."

Meanwhile American government scientists said last month was the hottest March worldwide since record-keeping began 135 years ago.

The National Oceanic and Atmospheric Administration said the average global temperature was 0.85 degrees Celsius above the 20th century average.

It said the three-month period from January to March was also the warmest on record.