Households may face short-term financial pain before reaping the longer-term rewards from tackling climate change.

A UN report setting out the stark reality of the climate crisis warns that humans are unequivocally driving global warming.

Here is a look at the impact that changing our behaviour could have on our wallets.

– How much could it cost to make a home more energy-efficient?

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “In the long run, cutting our emissions will make life better in so many ways, in the short-term, however, we face the pain of higher prices.

“Upgrading our homes to make them more efficient isn’t cheap. Retro-fitting energy savings measures on to an older home can easily cost tens of thousands of pounds, and many of the measures will take 10 to 20 years to recoup the cost through lower bills.”

– What about the move to electric vehicles?

GoCompare recently said it had seen an  an 84% increase in electric car insurance quotes over the past year.

However, the comparison website predicts there will not be a mass uptake of electric vehicles ahead of a planned 2030 ban on the sale of petrol and diesel vehicles.

Ms Coles said: “Electric cars cost more than their petrol or diesel equivalents, so if you’re buying new, you can easily spend £5,000 to £10,000 more.

“Buying second-hand electric cars, meanwhile, comes with the difficulty of taking on an older generation of battery, with a smaller range, so those who have tended to drive second-hand vehicles may need to buy new for the first time.

“The lower running costs mean you’ll eventually recoup the cost, but it will take years.”

Sue Davies, Which? head of consumer rights and food policy said: “When it comes to bigger lifestyle changes such as switching to electric vehicles or changing their home heating, there are significant barriers including lack of information and cost that are making it difficult for people to act.”

– How else could households end up paying more?

Ms Coles said flights, electricity and gas bills could become more expensive.

But people may be able to make lifestyle changes to help reduce their costs.

Ms Coles added: “You can use energy efficiency measures that don’t require an outlay, such as turning the heating down, or only filling the kettle with as much water as you need, which can make inroads into your bills.

“Likewise, you can cut down on car use, or drive more efficiently at lower speeds with less acceleration or braking.”

– What “green” financial products are available?

Rachel Springall, a finance expert at Moneyfacts co.uk said some providers, such as Gatehouse Bank, offer green bonds for savers.

She said: “The range offers competitive expected profit rates and the idea for the green bonds themselves is to support the environment and mitigate carbon emissions.

“NS&I are also expected to launch their own green savings bonds in the months to come and as a trusted Government-backed brand, it is likely they will get a lot of attention.”

Many lenders now offer green mortgages, which often give homeowners access to a cheaper borrowing rate.

Ms Springall said: “Green mortgages are a great way for borrowers to get either a discounted rate or unique incentive when meeting energy efficiency criteria and there have been more lenders entering the market in recent months.”

– How else can people use their money to make a difference?

The collective power of pensions and investments could make a significant difference to the planet.

The Make My Money Matter campaign, founded by filmmaker Richard Curtis, argues the £2.6 trillion circulating in UK pension schemes must be invested to build a healthy planet, as well as delivering healthy returns.

Workplace pension scheme members could ask their employers for more information about where their money is invested.

Huw Davies, senior finance adviser at Make My Money Matter, said: “We often say that there is no point retiring into a world on fire. However, this report indicates that the flames are getting higher.”

Ben Howarth, Association of British Insurers (ABI) manager for climate change and open data policy, said: “Our sector has a crucial role to play as both insurers and investors.

“As we’ve set out in our ambitious climate change roadmap, the insurance and long-term savings sector is committed to working collaboratively to meet net zero targets, to support customers who want to make more sustainable choices and, subject to action from Government and regulators, unleash further investment for green infrastructure.”

Randeep Somel, manager of M&G investments’ climate solutions fund said: “We need to encourage highly pollutive companies to transition their business models to more sustainable paths, and we also need to channel capital to those companies that are researching and providing the climate solution tools that we all need to adopt.”

– Does investing more ethically mean sacrificing decent returns?

Recent research from Moneyfacts.co.uk found that ethical funds overall provided returns of 19.87% over the past year, versus 17.89% for more “traditional” funds.

Moneyfacts said consumers newly investing or reviewing fund selections would be wise to seek advice and remember past performance is not a guarantee for the future.