Firms need to "fundamentally" change their business models to help the UK combat climate change, a report from business lobby the CBI has said.
Businesses need to be "green to grow" says the CBI
The UK is likely to miss its carbon reduction targets for 2020 but could meet its 2050 targets at a manageable cost, the report added.
If urgent action to cut emissions is taken, the cost could be limited to £100 a year per household by 2030.
New taxes and regulations are needed to reward climate-friendly firms, it said.
Green to grow?
Urgent action is needed, the CBI says
Current taxes and regulations were designed for the old economy, the report from the CBI climate change taskforce said.
Taskforce companies - which include businesses such BT, Tesco, Barclays and BP - pledged to develop products and services that will help households halve their emissions by 2020.
"This report makes clear that in the future, business needs to be green to grow," said the CBI's director general, Richard Lambert. "To manage their costs and to maintain the trust of their customers, they will need to build carbon management into their corporate DNA."
Research funding needs to be better co-ordinated and prioritised to enable British firms to take advantage of new business opportunities, he added.
"With the fight focus on research and development we can be at the forefront of new low carbon technologies that will power the world economy."
The Carbon Trust's chief executive Tom Delay welcomed the CBI report, citing it as further evidence that UK business has "not just woken up to the climate change debate but is on the move to engage and tackle it".
The publication of the CBI report coincides with the start of the industry lobby group's annual conference.