The findings were made in a report by former World Bank chief economist, Sir Nicholas Stern, which was commissioned by Britain’s finance ministry.
British Prime Minister, Tony Blair, has hailed it as "the most important report on the future which I have received since becoming Prime Minister."
"The report is clear: We are heading towards catastrophic tipping points in our climate unless we act," Mr Blair wrote in Britain’s tabloid newspaper, The Sun.
"The Stern report should be seen across the globe as the final word on why the world must act now to limit the damage we are doing to our planet.”
"The case for action is the final piece of the jigsaw to convince every single political leader, including those in America, China and India, that this must be top of their agenda," he argued.
The 700-page report focuses on the economic consequences of global warming, and is said to conclude that inaction could cost the world up to 3.68 trillion pounds ($A9 trillion).
The figure is estimated to be worth a fifth of the world's wealth.
Prime Minister Blair has described climate change as "the greatest long-term threat to our planet.”
Mr Blair says that there is now an opportunity to avert the threat of global warming, and concludes: "I hope that politicians and individuals everywhere take it."
Conservatives green pledge
Britain's opposition Conservative leader says he will put a wind turbine and solar panels on the roof of the prime minister's official residence, 10 Downing Street, if he wins the next election.
"If they'd let me, yes", David Cameron said when asked by an interviewer whether he would be prepared to install the energy saving devices.
"I'm doing it on my house in north Kensington, I think they (the solar panels) are going on quite soon," he told BBC television.
Cameron, 40, who became the party's fifth leader in nine years last December, has been pushing environmental policies up the Conservative's political agenda.
His comments came just before a government report is due to be published which will warn that ignoring climate change could lead to economic upheaval on the scale of the 1930s Depression.
A spokesman at Number 10 said he was not aware of any moves by the current government to install energy saving devices on the historic building, which has been the home of British prime ministers for over 200 years.
While the Conservatives currently lead in opinion polls, parliamentary elections do not need to be held until 2010.
Labor turns up heat on Howard
The Australian Labor Party says the government must tackle global warming amid concerns a failure to act would lead to global recession.
Labor's treasury spokesman Wayne Swan last week met the report’s author, Sir Nicholas Stern, after he'd briefed the British cabinet on the economics of climate change.
Mr Swan says failure to act will lead to a world-wide recession and leave large sections of the globe under water in 50 years' time.
But he says the government's failure to ratify the Kyoto protocol on reducing greenhouse gas emissions means Australia is starting a long way behind.