An Australia report released on Monday draws a direct link between inaction on climate change and long-term social and mental health problems.

The Climate Institute report, A Climate of Suffering: The Real Cost of Living with Inaction on Climate Change, points that in the wake of extreme weather in Australia, such as cyclones and droughts, there is an increase in depression, anxiety, post- traumatic stress and substance abuse.

As many as one in five people reported "emotional injury, stress and despair" in the wake of these events.

The report also warns continuing catastrophic weather events are creating anxiety and insecurity for children at levels not seen since the Cold War.

It claims one in 10 children of primary school age showed symptoms of post-traumatic stress disorder after Cyclone Larry in 2006.

According to Professor Ian Hickie, from the Brain & Mind Institute, regional and remote communities are most vulnerable to the impact of climate change.

He said a recent study of rural New South Wales where, following the long drought, self-harm and suicide rose by up to eight percent.

"I think what we are seeing now is a much more significant counting of not just the short-term costs and reactions but the longer-term costs, the loss of community cohesion and that being essential to people's long-term mental health," Professor Hickie.

"The drought was a particularly instructive event for everyone in Australia and we saw a lot of focus for the first time on the mental health effects, particularly suicides in rural families, the effect on rural communities of prolonged examples of weather change," Hickie said.

Climate Institute chief executive John Connor said that not only did natural disasters cost taxpayers about US$9 billion last year, but there are also damaging Australia's social fabric.

He said that with Australian regions increasingly exposed to extreme weather, recognizing and managing the risks of climate change is essential, and it is an insurance policy to protect Australia's communities.

The study came as the political and social debate over Australian federal government's proposed carbon tax intensifies.

In 2007, a report by the Commonwealth Scientific and Industrial Research Organization (CSIRO) projected the effects of various greenhouse gas emission scenarios for 2030, 2050 and 2070.

It said droughts were likely to become more frequent, fire danger was set to increase and tropical cyclones were likely to become more intense.