The Australian government is facing calls to set stricter emission reduction targets following a damning new report which warns that the country needs to cut its carbon emissions by 90 per cent before 2050 in order to avoid environmental catastrophe.

The 63-page interim report by Professor Ross Garnaut, which was commissioned by prime minister Kevin Rudd, claimed the government's targets of reducing emissions by 60 per cent before 2050 were inadequate.

The report argues that as the driest continent in the world after Antarctica, failure to deepen these targets by between 70 and 90 per cent – and set a new 2020 target this year – would have detrimental effects on Australia and the globe.

The report added that the pace of climate change went well beyond current estimates. "This makes mitigation more urgent and more costly," it said. "At the same time, it makes the probable effects of unmitigated climate change more costly for Australia and the world."

The Australian government attempted to play down the findings and said it would not budge on its 60 per cent pre-election target.

"We welcome professor Garnaut's input," said Penny Wong, minister for climate change. "[But] we will be looking at other inputs. The government's commitment is [for] a reduction of 60 per cent by 2050 – that is the approach the government will take."

Greenpeace Australia energy campaigner Ben Pearson told BusinessGreen the government needed to take the report's findings more seriously: "The report shows climate change is happening quicker than we thought and the impacts will be greater than we imagined. Targets need to be updated and just ruling this out is frankly very disappointing.”

He added that the government should also stop believing that improving environmental policies would cost money: "Minister Wong is saying the government can't take action as it will hurt the economy, but she has it the wrong way around. Not taking action will harm the economy.

"Garnaut pointed out that we could benefit from climate change. The notion that any action is an economic negative is Seventies economics and we need to move beyond that paradigm. We should be trying to position ourselves as a hub for what is going to be a multi-billion dollar carbon market."

The Garnaut report is the latest in a series of scientific studies suggesting that deeper cuts in carbon emissions will be required to avoid dangerous climate change.

The UK government is facing similar pressure to increase its legally-binding target of reducing emissions by 60 per cent by 2050 and has instructed the newly formed climate change committee to investigate whether 80 per cent cuts will be required.