By David Ljunggren

OTTAWA (Reuters) - Climate change will cause damage in Canada equivalent to around 1 percent of GDP in 2050 as rising temperatures kill off forests, flood low-lying areas and cause more illnesses, an official panel said on Thursday.

The National Round Table on the Environment and the Economy said Canada's Conservative government - strongly criticized by green activists for not doing enough to fight global warming - should take measures to mitigate the effects of climate change, blamed on greenhouse gas emissions.

The northern regions of Canada, the world's second largest country, are warming up at a much faster pace than the rest of the Earth.

"Climate change presents a growing, long-term economic burden for Canada," said the NRTEE, which the government set up in 1988 to provide advice on environmental issues.

According to the most likely scenario outlined by the panel, the damage done by global warming would be between 0.8 percent and 1 percent of GDP by 2050 and could hit almost 2.5 percent by 2075.

"The magnitude of costs depends upon a combination of two factors: global emissions growth and Canadian economic and population growth," the panel said.

Depending on how fast the world heats up and what actions the government takes, the NRTEE said the damage in 2050 could range anywhere from C$21 billion ($20 billion) to C$43 billion a year.

The panel recommended several measures to help limit damage from climate change:

* enhance forest fire prevention, control pests, and plant climate-resilient tree species

* prohibit new construction in areas at risk of flooding in coastal areas

* install pollution control technologies to limit ozone formation.

The panel largely dismissed the idea that global warming could help a northern country like Canada by reducing heating costs and making it easier to grow certain kinds of crops.

"Our houses are well insulated ... Prairie farmers are accustomed to variability in moisture levels from one growing season to the next, but recent research suggests the potential for more severe and frequent drought and unusually wet years, with implications for future yields," it said.

The NRTEE said Canada would benefit environmentally and economically from a global treaty that systematically reduced carbon emissions beyond 2012, when the first stage of the Kyoto Protocol expires.

Canada walked away from Kyoto after the Conservative government took power in 2006 and subsequently adopted a much more modest target for emissions cuts.

($1=$1.03 Canadian)

(Reporting by David Ljunggren; editing by Rob Wilson)