Professor Ross Garnaut's advice includes a warning that Australia faces a 92pc reduction in irrigated agriculture in the Murray Darling Basin if man-made climate change is not curtailed.

"Professor Garnaut's report makes it absolutely clear that the time for playing short term political games is over," Sen Wong said.

"This report is a timely reminder that the world is warming and this is causing more droughts, water shortages and extreme weather.

"Scientists have consistently warned that Australia is particularly vulnerable to climate change, given our already hot and dry conditions."

The report shows Australia's international terms of trade will be worse affected by climate change than any other country, driven by declines in demand from our major export markets.

"This confirms the Government's view that if we take action now, the cost will be far less than if we delay," Sen Wong said.

"In achieving that long term global solution, it is clear that unless developed countries demonstrate leadership, developing countries will not commit to the required reductions in greenhouse pollution."

Sen Wong says an emissions trading scheme (ETS) is the best way to reduce greenhouse pollution and protect the economy.

"It will encourage investment in the clean economy of the future and help reduce greenhouse pollution at the lowest possible cost to industry, businesses and families," she said.

Later this month the Federal Government will release a Green Paper on the ETS, which will form the basis for further consultation ahead of a White Paper and draft legislation later this year.