MERSEYSIDE'S economy could be £200m a year worse off by 2020 unless urgent action to tackle climate change is taken, a new report warns.

Research for The Mersey Partnership (TMP) also predicts 15% or 90,000 of city region jobs are in the sectors most likely to be affected by regulations to cut carbon emissions.

But the report also highlights the region's thriving environmental technologies sector which employs 9,000 and generates more than £1.1bn a year.

By capitalising on the region's geographical location and promoting investment in these areas an additional 7,000 jobs could be created in the next five to seven years.

TMP chief executive Lorraine Rogers said: "This report must focus our minds on the threats and opportunities we face in becoming a low-carbon economy.

"Tackling the challenges and grasping the opportunities will need strong leadership and foresight from the public and private sector if the region is not to be left behind other areas.”

The work was commissioned after climate change issues were identified by Sir Nicholas Stern in his national review for the government published in 2006.

This new report, dubbed mini Stern, aims to set out the challenges and opportunities specific to the Liverpool city region for dealing with legislation aimed at curbing carbon dioxide gases (CO2) emissions.

And it could help shape the future of the area's economy.

Environment leader for Liverpool City Council Cllr Berni Turner said: “The importance of this area cannot be understated.

"It is vital that local businesses get a clear understanding of the issues they face with climate change and the importance of developing a low-carbon economy which presents us with some real opportunities as well as challenges.”

The UK Climate Change Bill set binding targets of reducing CO2 by between 26% and 32% by 2020, against a 1990 baseline.