Climate change may cost the world $300 billion a year by the middle of this century unless urgent efforts are made to curb emissions of carbon dioxide and other gases linked with the "greenhouse effect".
A report by insurers for the United Nations Environment Programme (UNEP), published today, says the main losses would be due to more frequent tropical cyclones, loss of land as a result of rising sea levels and damage to fishing stocks, agriculture and water supplies.
In some low-lying states such as Bangladesh and the Maldives, annual losses could exceed 10 per cent of their gross domestic product by 2050. But even the European Union could face a bill of up to $36 billion related to higher mortality and health costs, as well as water management.
The report by Munich Re, one of the world's largest insurance companies, was published in advance of the 21st session of UNEP's governing council, which opens on Monday in Nairobi, Kenya. Some 100 environment ministers, including Mr Noel Dempsey, are expected to attend.
How to cope with the rising toll of natural disasters will be high on the agenda at the five-day session, which is the first such gathering since the collapse of last November's climate change summit in The Hague because of fundamental disagreements between the EU and the US. Mr Klaus Toepfer, UNEP's executive director, said action must be taken to reduce the emissions of greenhouse gases. But even this would not be enough, because the world had "already signed up to a certain level of human-induced climate change" as a result of industrialisation.
He said the latest report from the UN Inter-Governmental Panel on Climate Change had underscored the need for swift action. The panel, made up of thousands of scientists, believes that average global temperatures could rise by up to 5.8 degrees by the end of this century.
The estimates from insurers of the costs of climate change to the world's economy further underlined the need for governments to act. It was "crucial" that the stalled talks in The Hague were restarted so that they could take the first steps to deliver "meaningful" emission cuts.
According to Dr Gerhard Berz, head of Munich Re's geoscience research group, "there is reason to fear that climatic change will lead to natural catastrophes of hitherto unknown force and frequency which could trigger worldwide losses totalling many hundreds of billions of dollars".
In an article in UNEP's magazine, Our Planet, Dr Berz said that even in the United States, which had been most sceptical on the issue, annual costs could exceed $30 billion.
UNEP scientists are now developing an early warning system to try to reduce the misery and loss of life as a result of climate-related natural disasters.
It will pinpoint areas where communities are more vulnerable to catastrophes including floods, forest fires, mudslides and earthquakes.
