So what does the Stern Report mean for the world?

What is the Stern report, and what's so special about it?

It is the first really comprehensive review of the economics of climate change. For nearly 20 years it has been the science of climate change that has made all the headlines, as the world gradually realised that the continuing accumulation of greenhouse gases in the atmosphere was causing global temperatures to rise remorselessly. We have heard about disappearing glaciers, catastrophic floods and fatal heatwaves, and we have heard of dire predictions of worse to come in the future. We've heard a thousand calls to action, to stop global warming happening. But what would that cost the world? And what would doing nothing cost us? Hitherto, no one had any real idea. But now Sir Nicholas Stern and his team have come up with concrete numbers.

Does the report have a key conclusion?

Yes. That although dealing with global warming by cutting emissions of greenhouse gases will cost a lot of money - about 1 per cent of the world's gross domestic product, trillions of dollars - doing nothing about it will cost the world an awful lot more, anything from five to 20 times more. We face losing up to a fifth of the world's wealth from unmitigated climate change, says the review - if unchecked, it will devastate the global economy on the scale of the Great Depression or the 20th century's world wars.

Why is that conclusion important?

Crucially, because the world's leading climate change sceptics, which comprise the Republican business community in the United States and the Bush administration which so faithfully reflects their views, are against acting to prevent climate change by cutting carbon emissions on the grounds that to do so would damage the US economy. And as the Americans, who have 4 per cent of the world's population, produce nearly a quarter of all the world's greenhouse gases, any effort to fight climate change without them is doomed to failure. The Stern Review says, quite simply, that not acting is actually the much more expensive option. The US will be hit as much as anywhere else.

Will the American sceptics listen to that?

George Bush, Dick Cheney, Donald Rumsfeld and Jubilation T Cornpone from the Republican National Committee are not going to go down on their knees and admit they were wrong, no. Or at least, not overnight. But the report cannot but have a very widespread and steadily growing influence, partly because of its scope and detail - it is 600 pages long and feels like a doorstep - and also because Sir Nicholas Stern is an immensely prestigious figure. He is not only the head of the Government Economic Service in the UK, he is a former chief economist of the World Bank in Washington. He is an economist, not an environmentalist.

What else does the report tell us that's important?

Another absolutely vital conclusion is that dealing with climate change, even though very costly, need not derail worldwide economic growth. The report stresses that the two are compatible. Major action to mitigate emissions, it says, is "fully consistent with continued growth and development". This will be very welcome to business, and to developmentalists, who for example see growth as Africa's only hope of escaping from poverty. But it will seem counter-intuitive to some more radical environmentalists, who have long contended that the world's remorseless pursuit of ever more riches cannot go hand in hand with solving the world's greatest environmental problem. The "deep greens" feel the way forward is for a different type of economic system based on sufficiency rather than growth. But politicians will be the most relieved of all at the Stern conclusion - Mr Blair made this quite clear yesterday. Where dealing with climate is concerned, the thrust of the Stern Review is this: out goes sackcloth and ashes, in comes having your cake and eating it (as long as you take the problem seriously, now).