But the author, former World Bank chief economist Nicholas Stern, said that if action was taken now the benefits of determined worldwide steps to tackle global warming would massively outweigh the economic and human costs.

"The Stern review has done a crucial job. It has demolished the last remaining argument for inaction in the face of climate change," British Prime Minister Tony Blair said at the launch of the 580-page report, commissioned by his government last year.

"We know now urgent action will prevent catastrophe, and investment in preventing it now will pay us back many times."

Britain is pushing for a post-Kyoto Protocol framework that would include the United States -- the world's biggest producer of greenhouse gases that cause climate change -- as well as major developing countries such as China and India.

President George W. Bush pulled the United States out of the Kyoto Protocol -- which obliges 35 rich nations to cut carbon emissions from burning fossil fuels in power plants, factories and cars -- in part because he said it hit jobs.

Stern's report estimates that stabilising greenhouse gases in the atmosphere will cost about 1 percent of annual global output by 2050. Inaction, however, could cut global consumption per person by between 5 and 20 percent.

The report estimates the net benefits of taking strong action this year to combat climate change at US$2.5 trillion.

Failure to act could plunge the world into an economic crisis on a par with the 1930s Depression, it said.

"WAKE-UP CALL"

"The Stern Review is a wake-up call to the world," said Hans Verolme, a climate change expert at environmental group WWF.

WWF urged governments meeting in Nairobi for UN climate talks from Nov. 6 to produce a clear plan for extending the Kyoto agreement beyond 2012.

Steve Sawyer, climate change expert at environmental group Greenpeace, praised Stern's message that doing nothing was costly. But he said the recommendations did not go far enough in trying to halt the rise of greenhouse gas emissions.

A spokeswoman for the European Commission in Brussels welcomed the report.

The White House Council on Environmental Quality said: "The US government has produced an abundance of economic analysis on the issue of climate change. The Stern Report is another contribution to that effort."

Richard Tol, senior research officer at Ireland's Economic and Social Research Institute, called Stern's report alarmist, saying it overestimated the impact of climate change.

British finance minister Gordon Brown, who said harnessing the power of markets through a global carbon trading system was one of the best ways to curb the output of polluting gases.

Sharing a platform with Blair and Stern, Brown proposed a new European Union target for emissions reductions of 30 percent by 2020 and 60 percent by 2050 and expansion of an existing carbon trading scheme to cover more than half of emissions.

Brown wants the EU scheme, which sets overall limits for carbon emissions but then allows businesses to trade their quotas, to be linked with Australia, California, Japan, Norway and Switzerland so as to set a global carbon price that fixes a clear cost for pollution.

Brown said the British government would launch a new law to enshrine its goal of cutting carbon dioxide emissions by 60 percent by 2050.

He said former US Vice President Al Gore, who created a stir this year with his climate change film An Inconvenient Truth, would become one of his environmental advisers.