Sir Nicholas Stern, professor, former world bank economist and now the Labour Government's chief economist, warns in a new 700 page report that the financial cost of ignoring climate change could be a permanent 20% reduction in global output.

The report effectively does away with the argument, in particular favoured by the American government, that it is too expensive to deal with global warming and climate change.

The Bush administration has been silent on the report, and it is expected to take some time before it is being officially recognised by the White House that its environmental policy of the last decade has been the wrong one.

In strict economical terms, professor Stern explains that a 20% drop is the equivalent of £3.68 trillion - while to act quickly would cost only £184bn annually, or just 1% of the world GDP.

The report has kicked the Labour Government into action. David Miliband, Labour's Environment Secretary, has written to Gordon Brown asking him to urgently consider a range of green taxes to be included in the next budget.

Mr. Miliband's proposal covers a number of green taxes:
1) Tax increase for high-emission vehicles.
2) Finding a way of charging road users for the impact of their journeys.
3) Petrol prices should be kept high, even when the oil price falls.
4) A £5 levy per flight and VAT on flights to EU countries.
5) Encourage consumers to purchase more energy efficient goods

Environment organisations welcomed the report. However, many suggested that it did little more than confirm what had been common knowledge for more than a decade.

Carbon-info.org's Chairman, Flemming Bermann, said that he "welcomed the report, though it was disappointing that it appeared as if the politicians only wanted to save the planet if it made financial sense."

Other key-findings from the Stern report are:
1) World temperature likely to rise by 2C by 2050
2) World temperature likely to rise by 5C by 2100
3) Up to 200 million people could become climate refugees
4) 40% of all species would be faced with extinction by a 2C increase
5) Remedial action will cost 1% of global GDP, but save £1.32 trillion
6) Governments must use tax to reduce carbon emissions
7) Governments must double investment in low-carbon research
8) The worst impact of climate change can still be avoided, but any further delay to act will be costly.