Tony Blair appealed to world leaders to unite to tackle the threat of climate change as a major review of rising temperatures warned that time was running out.

A report by former World Bank chief economist Sir Nicholas Stern warned that up to 200 million people could become refugees as their homes are hit by drought or flood.

Global warming could shrink the global economy by 20 per cent, the 700-page study said.

But taking action now would cost just one per cent of global gross domestic product, it predicted.

The Government responded with a blueprint for a new global framework to cut greenhouse gas emissions.

The Prime Minister said: "What is not in doubt is that the scientific evidence of global warming caused by greenhouse gas emissions is now overwhelming."

Speaking at the report’s launch at the Royal Society in London, he added: "It is not in doubt that if the science is right, the consequences for our planet are literally disastrous.

"This disaster is not set to happen in some science fiction future many years ahead, but in our lifetime."

The report put the cost of unchecked climate change at between five per cent and 20 per cent of global output, but calculated that carbon emissions could be stabilised for around one per cent of output if action was taken now.

Sir Nicholas said: "There is still time to avoid the worst impacts of climate change, if we act now and we act internationally. But the task is urgent. Delaying action, even by a decade or two, will take us into dangerous territory."

The report set out a three-pronged strategy based on carbon pricing, support for the development of low-carbon technologies, and a drive to "inform, educate and persuade" individuals about what they do. The Government yesterday announced it would legislate to reduce CO2 emissions and combat climate change.

Environment Secretary David Miliband said a Bill would establish an independent Carbon Committee to cut emissions.

It will also give ministers "enabling powers" to put in place new measures to tackle the problem.

Gordon Brown, who commissioned Sir Nicholas’s report, set out proposals for a new European-wide emissions reduction target of 30 per cent by 2020, and at least 60 per cent by 2050, eventually to be extended worldwide.

The Chancellor has also recruited former US Vice-President Al Gore as an environment adviser.

But the Government is believed also to be considering a range of measures which would be paid for directly by the public.

They include a mechanism to ensure savings when oil prices go down, which would usually mean cheaper petrol, go to the Treasury rather than to motorists.

Ministers are also looking at a "substantial increase" in road tax for higher-emission vehicles to encourage people to drive cars which pollute less, and raising air passenger duty by #5 and making flights subject to VAT.

The Government is also planning to introduce road pricing across the UK.

Conservative Shadow Chancellor George Osborne welcomed the report.

He said: "The Stern Report will shape the economic policies of the next Conservative Government."

He added: "However, it is vital that the environment does not become an excuse for a back-door increase in taxation.

"So any increase in green taxes should be off-set by a reduction in taxes on family incomes."

Liberal Democrat Environment Spokesman Chris Huhne said: "This report will have a very significant impact in moving economic and business thinking towards the view that the sooner we tackle the problem the better."

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