The Climate Change Minister says the new global deal at COP28 summit to call on all countries to move away fossil fuels is a historic agreement.
A new global deal on climate change has been approved by almost 200 countries.
It is the first time there has been a clear reference to the future of all fossil fuels in a United Nations summit text.
But the deal does not include any wording on the "phase out" of fossil fuels, something many countries were demanding.
Climate Change Minister Simon Watts said New Zealand was calling for more ambition but "at the end of the day, we've got a step forward and that's pretty historic".
Watts told Morning Report the reality was all countries had agreed to align their ambitions.
"We've had a pretty historic agreement in the context that we've now got consensus and countries have committed not only to get to net zero energy, but also to build a world that no longer relies on fossil fuels - first time that's happened," he said.
"Could more be done and should more be done going forward? Yes, but this is a significant step forward for a consensus decision."
Pacific climate warrior Brianna Fruean of a Pacific Islands youth-led grassroots network said she could not celebrate a deal that puts their survival on the line, given it would not limit warming to less than 1.5 degrees celsius.
Asked what New Zealand was doing to stand up for Pacific Island nations, Watts said he had been continuing dialogue with them over the past five days alongside Australia.
New Zealand acknowledges the serious concerns raised by Samoa on behalf of the alliance of small island states, he said.
"And New Zealand stands with our Pacific Island neighbours."
Implementation of the agreement would be the challenge, he said.
"I'm optimistic because we have to be optimistic because we do not have a choice and our Pacific neighbours know that they do not have a choice if others around them don't act, so we're taking that pretty seriously."
New Zealand needs to start getting a clear plan to allow us to decarbonise, he said.
Significant work on methane reduction in the agriculture sector was also needed, he said.