Global warming will devastate economy: report

Global warming could devastate the world economy on a scale we haven't seen since the world wars and the Great Depression, a major report by a British economist says.

Sir Nicholas Stern, the report's author and a senior government economist, said unchecked global warming could shrink the global economy by 20 per cent -- and cost a whopping $7 trillion in lost output.

British Prime Minister Tony Blair, who introduced the report today, called for "bold and decisive action" to cut carbon emissions and stem the worst of temperature rise.

He said the Stern Review showed scientific evidence that global warming was "overwhelming" and its consequences "disastrous."

If no action is taken, says Stern, up to 200 million people could become refugees as their homes are hit by drought or flood from rising sea levels.

Further, up to 40 per cent of wildlife species could become extinct, and melting glaciers could cause water shortages for one sixth of the world's population, the report says.

Despite the gloomy forecast, Stern said he is "optimistic" that if the world powers act "strongly and urgently," the effects can be minimized.

Stern's report is expected to increase pressure on the administration of U.S. President George W. Bush to step up its efforts to fight global warming. The Bush administration never approved the Kyoto climate-change accord.

Stern is a former chief economist of the World Bank.

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