Lord Stern has this week warned that the cost of avoiding dangerous levels of global warming has doubled since he published his influential report on the economics of climate change in late 2006.

In the report, Stern concluded that one per cent of global GDP would have to be invested in transitioning towards a low-carbon economy if levels of carbon dioxide are to be kept between 450 and 550 parts per million (ppm) – the level scientists claimed would be required to reduce the risk of temperatures rising by "dangerous" levels.

The report argued that failure to undertake this investment would result in an economic catastrophe on the scale of the Great Depression, with up to 20 per cent being knocked off of global GDP.

But according to Guardian reports, Stern said this week that the latest science suggested emissions would have to be faster than he originally envisaged and as such the cost of mitigation has risen.

Speaking at the launch of IDEAcarbon's new carbon credit rating service, Stern, who is also a chairman of IDEAcarbon's parent company, said he now believed concentrations of CO2 needed to be stabilised at fewer than 500ppm. He said this would reduce the risk of temperatures rising by five degrees centigrade above pre-industrial levels from a 50 per cent chance to a three per cent chance. He added that with concentrations currently standing at 430ppm and still rising, it would cost about two per cent of GDP to avoid breaking the 500ppm level.

The warning comes at a critical time for the government, which yesterday saw a mixed response to its plans to ensure 15 per cent of UK energy comes from renewable sources by 2020.

While green groups and the renewable energy industry praised the new strategy as a step change in the government's approach to renewable energy, much of the media coverage focused on the likely impact on fuel costs.

The government admitted that the programme – which is centred on a massive expansion in wind energy capacity and onsite renewables – would require £100bn of investment from the private sector and will see consumer gas bills rise 37 per cent and electricity costs climb 13 per cent.

Consumer groups raised fears that the renewables strategy would lead to an increase in fuel poverty, while the CBI openly questioned whether the plan represented the most cost-effective means of curbing carbon emissions. " Business has long supported pragmatic and cost-effective solutions to meeting our carbon targets, but the EU renewables target is neither of these things," said deputy director general John Cridland. "As today’s document explains, the target is likely to cost the UK an additional £6bn a year, much of which will fall on businesses and households."

Business secretary John Hutton said the increase in energy costs would be modest compared to the projected increases in energy bills that are expected to happen anyway. However, ministers now reportedly accept in private that government thinking on climate change is significantly ahead of that of the public and that they could struggle to push through any more costly reforms, particularly at a time when concerns about the state of the economy are mounting.