The day that changed the climate

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Climate change has been made the world's biggest priority, with the publication of a stark report showing that the planet faces catastrophe unless urgent measures are taken to reduce greenhouse gas emissions.

Future generations may come to regard the apocalyptic report by Sir Nicholas Stern, a former chief economist at the World Bank, as the turning point in combating global warming, or as the missed opportunity.

As well as producing a catastrophic vision of hundreds of millions fleeing flooding and drought, Sir Nicholas suggests that the cost of inaction could be a permanent loss of 20 per cent of global output.

That equates to a figure of £3.68 trillion - while to act quickly would cost the equivalent of £184bn annually, 1 per cent of world GDP.

Across the world, environmental groups hailed the report as the beginning of a new era on climate change, but the White House maintained an ominous silence. However, the report laid down a challenge to the US, and other major emerging economies including China and India, that British ministers said cannot be ignored.

Its recommendations are based on stabilising carbon dioxide and other greenhouse gas levels in the atmosphere at between 450 and 550 parts per million - which would still require a cut of at least 25 per cent in global emissions, rising to 60 per cent for the wealthy nations.

It accepts that even with a very strong expansion of renewable energy sources, fossil fuels could still account for more than half of global energy supplies by 2050.

Presenting the findings in London, Tony Blair said the 700-page document was the "most important report on the future" published by his Government. Green campaigners said that at last the world had woken up to the dangers they had been warning about for years.

Gordon Brown, the Chancellor, and likely next Prime Minister, assumed the task of leading the world in persuading the sceptics in the US, China and India to accept the need for global co-operation to avert the threat of a global catastrophe. He has enlisted Al Gore, the former presidential candidate turned green evangelist, to sell the message in the United States, with Sir Nicholas.

While the Bush administration refused to be drawn on the report, US environmental groups seized on it to demand a major change in policy. "The President needs to stop hiding behind his opposition to the Kyoto protocol and lay a new position on the table," said the National Environmental Trust, in Washington. The Washington Post said in an editorial that it was "hard to imagine" that the "intransigence" of the administration would long survive its tenure. "Will [Mr Bush] take a hand in developing America's response to this global problem," it asked, "Or will he go down as the President who fiddled while Greenland melted?"

Sir Nicholas's report contained little that was scientifically new. But British ministers are hoping his hard-headed economic analysis will be enough to persuade the doubters in the White House to curb America's profligate use of carbon energy.

In the Commons, Environment Secretary, David Miliband, confirmed that ministers were drawing up a Climate Change Bill, which would enshrine in law the Government's long-term target of reducing carbon emissions by 60 per cent by 2050. But he declined to go into any detail.

Mr Blair said the consequences for the planet of inaction were "literally disastrous".

"This disaster is not set to happen in some science fiction future many years ahead, but in our lifetime," he said. "We can't wait the five years it took to negotiate Kyoto - we simply don't have the time. We accept we have to go further [than Kyoto]."

Sir Nicholas told BBC radio: "Unless it's international, we will not make the reductions on the scale which will be required."

Pia Hansen, of the European Commission, said the report "clearly makes a case for action".

"Climate change is not a problem Europe can afford to put into the 'too difficult' pile," she said. "It is not an option to wait and see, and we must act now."

Charlie Kronick, of Greenpeace, said the report was "the final piece in the jigsaw" in the case for action to reduce emissions. "There are no more excuses left, no more smokescreens to hide behind, now everybody has to back action to slash emissions, regardless of party or ideology," he said.

The CBI director general Richard Lambert said a global system of emissions trading was now urgently needed as a "nucleus" for effective action. "Provided we act with sufficient speed, we will not have to make a choice between averting climate change and promoting growth and investment."

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