"Dramatic changes to the lives and livelihoods of Arctic-living communities are being forecast unless urgent action is taken to reduce greenhouse gases," the UN Environment Programme said in a statement.

Rising temperatures were also a threat to animals such as polar bears and seals which live on the ice.

Among problems on land, a melting of permafrost is "likely to have significant implications for infrastructure including houses, buildings, roads, railways and pipelines," it said.

"The impervious nature of ice-rich permafrost has been relied upon as a design element in landfill and contaminant holding facilities," a chapter of the report says.

A thaw of the permafrost could bring "severe contamination" and "large cleanup costs, even for relatively small spills," it said. The former Soviet Union dumped waste across the Arctic.

The report says that the area of permafrost in the northern hemisphere is expected to shrink in mid-century by around 20 to 35 per cent.

"The costs of relocating subsiding towns and villages could be high. The price tag for relocating a village like Kivalina in Alaska has been estimated to be US$54 million," it said.

The report also said that annually averaged sea ice in the Arctic could shrink by between 22 and 33 percent by 2100.

Northern forests might grow faster but would be exposed to fires and tree-killing insects such as spruce bark beetle that are normally kept in check by the winter frosts.

The Arctic is warming faster than the rest of the globe, partly because dark ground and water, once exposed, soaks up ever more heat than reflective snow and ice.

It said there could be some benefits from warming, for shipping and access to oil and gas. Ships with ice-strengthened hulls could sail a northern sea route from the Atlantic to the Pacific past Russia for 125 days a year by 2050, it said.