LONDON - Failing to fight global warming now will cost trillions of dollars by the end of the century even without counting biodiversity loss or unpredictable events like the Gulf Stream shutting down, a study said today.
But acting now will avoid some of the massive damage and cost relatively little, said the study commissioned by Friends of the Earth from the Global Development and Environment Institute of Tufts University in the United States.
"The climate system has enormous momentum, as does the economic system," said co-author Frank Ackerman. "We have to start turning off greenhouse gas emissions now in order to avoid catastrophe in decades to come."
The study said the cost of inaction by governments and individuals could hit 11 trillion pounds (NZ$31 trillion) a year by 2100, or six to eight per cent of global economic output then.
Most scientists now agree average temperatures will rise by between two and six degrees Celsius by the end of the century, driven by so-called greenhouse gases like carbon dioxide from burning fossil fuels for power and transport.
Already at two degrees they predict a massive upsurge in species loss and extreme weather events like storms, droughts and floods, threatening millions of lives. Polar icecaps will melt, raising sea levels by several metres.
Beyond that, the world enters into the unknown with the possible shutdown of the life-giving Gulf Stream and possibly catastrophic runaway change due to so-called climate feedback.
By contrast, spending just 1.6 trillion pounds (NZ$4.5 trillion) a year now to limit temperature rises to two degrees could avoid annual economic damage of around 6.4 trillion pounds, the Tufts report said.
The report came the day after oil major Shell said business should see the challenge of climate change as a chance to make billions of pounds due to the demand for new technologies and products to slash carbon emissions.
"For business, tackling climate change is both a necessity and a huge opportunity. We have to step up to the challenge," Shell UK chairman James Smith said.
The British government is in the closing stages of a ground-breaking global study of the economic costs of climate change which is expected to be published within the next two weeks stressing the massive costs of inaction.
During a debate in parliament on Thursday Environment Minister David Miliband said the problem was worse than previously thought and the sternest challenge faced by mankind.
"Preventing the transformation of the earth's atmosphere from greenhouse to unconstrained hothouse represents arguably the most imposing scientific and technical challenge that humanity has ever faced," he said.
"It is local, national and international. It will affect all of us as well as all our children," he added.
Britain is set to meet its Kyoto target of cutting carbon emissions by 12 million tonnes by 2012, but the government is under pressure from opposition parties and environment groups to introduce laws setting enforceable national reduction targets.