New laws are to be brought in to help the UK reduce its carbon dioxide emissions over the next 44 years.
The Stern report said action was needed
A Climate Change Bill will include moves to help the UK reduce emissions from 1990 levels by 60%, by 2050, said Environment Secretary David Miliband.
He did not give details of any green taxes, but said "enabling powers" would allow new measures to be put in place.
Earlier, the Stern Report said global warming could shrink the global economy by 20% unless urgent action was taken.
Mr Miliband welcomed the report, saying it was a "landmark in the debate on climate change".
"Today, we are proposing that the EU commits to new targets to reduce greenhouse gas emissions by 30 per cent by 2020 and at least 60 per cent by 2050," he said in a Commons statement to MPs.
"Our climate change legislation will provide a clear, credible, long term framework for the UK to achieve its long term goals of reducing carbon dioxide emissions."
The Climate Change Bill looks certain to be included in next month's Queen's Speech - but ministers traditionally do not confirm its precise contents.
Instead Mr Miliband told MPs the bill would be built on "four pillars".
These consisted of reducing CO2 emissions, creating an independent body to help achieve that, introducing "enabling powers" to allow new measures to be introduced and considering extra monitoring arrangements.
Shadow Environment Secretary Peter Ainsworth said the government had responded to Conservative calls for a Climate Change Bill.
But he told Mr Miliband: "We don't want a watered down Climate Change Bill, nor one based on four wobbly pillars. We want a bill which will create a green revolution throughout government."
Lib Dem leader Sir Menzies Campbell said the report was "a wake-up call".
"This is an issue which we simply can't ignore. If we are going to be able to deal with it, there are hard decisions to be taken, both domestically and internationally as well," he said.
The Stern report urged immediate, international action
For the Green Party, Darren Johnson said he was pleased to see an end to the "false debate" that environmental measures would hit the economy.
He said the government continued to support road building, airport expansion and had a poor record on energy efficiency.
He told the BBC: "We really do need to be speeding ahead - but it means this government has a whole lot of rethinking to do."
The Stern Report warned action had to be taken urgently - saying that without action, up to 200 million people could become refugees due to drought or flood.
Prime Minister Tony Blair said the consequences of doing nothing were "literally disastrous", while Chancellor Gordon Brown promised the UK would lead the international response to climate change.