Hundreds of millions of people could suffer from hunger, water shortages and coastal flooding as the world gets warmer, according to a major report published today on the likely economic impacts of climate change.

Sir Nicholas Stern, the former chief economist at the World Bank, said at the launch of the 700-page report that it made good economic sense to tackle global warming now before irreversible damage is done to the planet and the costs mount.

The report - hailed by Tony Blair as the most important report on the future ever published by his Government - puts the cost of tackling global warming now at just 1 per cent of global GDP a year.

"That is manageable," Sir Nicholas said of that figure. "We can grow and be green."

But if nothing is done to reduce carbon emissions, the report predicted, the eventual cost would be a minimum of 5 per cent of economic activity and could rise as high as 20 per cent, costing the world as much as $3.68 trillion.

The report, commissioned by Gordon Brown, the Chancellor, comes in stark contrast to the Bush Administration's wait-and-see approach on global warming.

The Government hopes to use the Stern Review on the Economics of Climate Change to bring the United States, and India and China, on board an international agreement to succeed the Kyoto Protocol. Discussions on a post-Kyoto deal will resume at UN talks in Nairobi on November 6.

Mr Brown also confirmed today that Al Gore, the former US Vice-President who is now a leading campaigner against global warming, would act as an adviser to the Government on climate change.

Apart from its economic impacts, the Stern report also warns of the devastating effect that that uncontrolled climate change would have on the world’s population.

Failure to act could see 200 million people permanently displaced if the world’s temperature rises by 3C (5.4F) from pre-industrial levels.

Rising sea levels from melting glaciers and ice sheets could flood the homes of hundreds of millions of people each year with a warming of 3C-4C. And between 15 and 40 per cent of species could face extinction if the world’s temperatures rose by just 2C.

The report concludes that all countries will face global warming but those hardest hit will be poorer nations, many of which already struggle to produce enough crops to feed the population. The most serious and widespread consequences will be in Sub-Saharan Africa where millions more will die from malnutrition, diarrhoea, malaria and dengue fever, unless effective control measures are in place.

Sir Nicholas said: "The task is urgent. Delaying action even by a decade or two will take us into dangerous territory. We must not let this window of opportunity close.

"Government, businesses and individuals all need to work together to respond to the challenge. Strong, deliberate policy choices by governments are essential to motivate change."

Sir Nicholas admitted that the cost of reducing carbon emissions would ultimately fall to consumers who would pay more for carbon intensive goods or services, like cars or electricity. But he said that the extra costs would be "manageable".

The report highlighted the devastating effect that deforestation has on climate change, which it says contributes more to global emissions each year than transport industries. It also recommended that spending on research and development double to £10.5 billion and that more resources are given to poor countries to help them compete.

The Chancellor today set out proposals for a new European-wide target to reduce emissions by 30 per cent by 2020, and by at least 60 per cent by 2050. Mr Brown said he hoped it would eventually to be extended worldwide.

Speaking at the launch of the report, the Prime Minister said that failure to act now would be "disastrous" for the planet and the damage would be "irreversible".

He said: "There is nothing more serious, more urgent, more demanding of leadership - here, of course, but most importantly in the global community.

Mr Blair said that the report "demolished the last remaining argument for inaction in the face of climate change". He added: "Should we fail to rise to this challenge I don’t believe we will be able to explain ourselves to future generations that we have let down."

The climate report was widely welcomed by charities and businesses. Charlie Kronick of Greenpeace said it was "the final piece in the jigsaw" and that "everybody has to back action to slash emissions, regardless of party or ideology." The Confederation for British Industry said that the review was a "powerful argument for collective action by the nations of the world".

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• How I lost the gift of joy for a while
• Why Ann Widdecombe has got it wrong
• Alas, it’s the end of the road for petrolheads