U.K. Report: Warming Will Damage Economy

Britain's Prime Minister Tony Blair, left, arrives with Chancellor of the Exchequer Gordon Brown for the release of the Stern report on climate change at the Royal Society in London, Monday Oct. 30, 2006. The report by Sir Nicholas Stern, a senior government economist, reviews the likely impact of climate change, and warns that rising temperatures could cut economic growth by as much as one-fifth. (AP Photo / Kieran Doherty, Pool) (Kieran Doherty - AP)

"Using the results from formal economic models, the review estimates that if we don't act, the overall costs and risks of climate change will be equivalent to losing at least 5 percent of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20 percent of GDP or more," it said.

The report acknowledged its predictions regarding GDP used calculations that had to rely on sparse or nonexistent observational data about high temperatures and developing countries, and to place monetary values on human health and the environment, "which is conceptually, ethically and empirically very difficult."

Stern said the world must shift to a "low-carbon global economy" through measures including taxation, regulation of greenhouse gas emissions and carbon trading.

In a world where fossil fuels provide about 80 percent of the energy supply, he recommended a halt to deforestation, technology aimed at clean power, heat and transportation and developing ways to capture and store greenhouse gas emissions.

The British government is considering new taxes on cheap airline flights, fuel and high-emission vehicles. It also announced legislation that would set a goal of cutting carbon dioxide emissions by 60 percent from 1990 levels by 2050.

Under the Kyoto accord, 35 industrialized nations committed to reducing emissions by an average 5 percent below 1990 levels by 2012.

Britain is one of only a few industrialized nations whose greenhouse gas emissions have fallen in the last 15 years, the United Nations said. It said Germany's emissions dropped 17 percent between 1990 and 2004, Britain's by 14 percent and France's by almost 1 percent.

Overall, there was a 2.4 percent rise in emissions by 41 industrialized nations from 2000 to 2004, mostly because former Soviet-bloc countries increased emissions by 4.1 percent.

Stern is scheduled to discuss his report next week at the U.N. Climate Change Conference in Kenya.