World leaders gathering in Japan ahead of next week's G8 summit received welcome news today with the publication of a new report from PricewaterhouseCoopers claiming that cutting global carbon emissions in half by 2050 is both technically feasible and economically affordable, but only if politicians act quickly.

The report, which updates a similar study carried out in 2006, claims that cutting emissions in half would cost around three per cent of GDP, a scenario the accountancy firm insisted was affordable.

"This is broadly equivalent to sacrificing around a year of global GDP growth between now and 2050," said John Hawksworth, head of macroeconomics at PwC and the main author of the report. "In other words, reaching the same level of GDP in 2051 as might otherwise have happened in 2050."

The report calculates that for the 50 per cent target to be met developed economies will need to cut emissions by 80 per cent by 2050, while the seven largest emerging economies - China, India, Brazil, Russia, Mexico, Indonesia and Turkey - will be allowed to continue to grow emissions up to 2020 at which point they too will need to begin to reduce their emissions.

It adds that this can only be achieved through a major overhaul of global climate change policy, centred on a huge increase in renewable energy capacity, nuclear power and carbon capture systems (CCS), and greater efforts to tackle deforestation.

The report said that higher oil and gas prices should help drive this energy revolution, but warned that a global carbon price of over $40 a tonne, imposed either through carbon trading or taxation mechanisms, would be required to encourage the shift to cleaner energy sources.

"The key requirement now is for governments in all of the major economies to demonstrate their joint political will to establish a well-functioning global carbon market that puts a price on carbon emissions," said Richard Gledhill, head of climate change services at PwC. "This will send the right economic signals to private sector investors and consumers needed to deliver the new technologies and changes in behaviour required to combat global warming."

PwC also warned that such policies needed to be embraced as a matter of urgency, noting that higher than expected growth from China and India meant that the business as usual scenario was now worst than envisaged two years ago and as a result the estimated cost of tackling emissions had risen from between two and three per cent of GDP to thee per cent.