For every 2.5 degree celsius rise in global temperature, the damage to India is predicted to be 4.9 per cent of the gross domestic product, highest for any country, according to a key finding of a research by global financial services firm Morgan Stanley.

The study titled 'The Economics of Climate Change - a Primer' correlates damages created by climate changes with GDP of different nations and concludes that the effects would vary considerably among countries, based on their exposure to climate-related damage, emission intensity and ability to adapt to such damage and cut carbon emissions.

"In terms of exposure to climate-related damage, Korea, Pakistan, China, India and South Africa seem most at risk. With the exception of South Korea, these countries also have limited ability to cope with the high degrees of human vulnerability and elevated environmental stress levels," the report pointed out.

It reveals that emerging markets seem more vulnerable to climate change than industrial countries because of their geographic exposure, low income levels, poor governance, limited availability of health-care services, less developed financial markets (lending and insurance), and a larger role of climate-sensitive sectors (agriculture, forestry, fishing and tourism).

"Climate change could thus meaningfully affect the optimistic growth outlook for emerging market economies," the report said.

In India, agriculture sector would be most affected due to climate changes, the study said. Developed economies and well-integrated, regional economic free-trade areas should help to absorb the consequences of climate changes, it added.

However, it pointed out that "such regional free-trade agreements might also be put to a serious stress-test when climate change creates major asymmetric shocks. This holds true in particular for monetary unions and fixed or quasi-fixed exchange rate regimes, which in an extreme case could fall apart in the event of a major climate shock."

In terms of carbon emission, India is one of the largest emitters and along with China, European Union and Russia, accounts for nearly 60 per cent of the global emissions.

Further, the 25 top emitters account for more than 80 per cent of global emissions and nearly 90 per cent of the global GDP.

According to the study, road transport is currently the fastest growing source of Green House Gas (GHG) emissions, with a growth rate of 20-25 per cent over the last decade in many industrial countries and at a much faster rate of expansion in emerging markets.

Carbondioxide emissions from the sector are expected to double by 2050, with an estimated growth of 67 per cent in India and 143 per cent in China.

Pointing out the need to review long-term growth, inflation and risk projections in light of climate change, the report said: "The politics of climate change is a key factor because it set caps for carbon emissions and chooses the policy instruments to achieve them, both of which are key to containing climate change."

Moreover, decisive efforts to contain climate change could trigger a phase of faster technological and structural change, it added.