The UN development agency called Wednesday for a currency transaction tax to help the world's poorest countries deal with the effects of climate change.

"In updated analysis prepared for this report, the North-South Institute estimates that a tax of 0.005 percent would yield around $40 billion a year," said the UNDP's annual Human Development Report.

"The revenue potential is thus huge," it added.

"Even a unilateral currency transaction tax limited to the euro could mobilise $4.2 to $9.3 billion in additional financing," it said.

"Clearly then, a currency transaction tax could, even under very conservative assumptions, dramatically scale up global public good expenditure," it added.

France, which holds the presidency for the G20 this year, has been pushing for a tax on financial transactions to fund development projects. It is expected to make the same pitch when heads of state of the group of 20 nations gather in Cannes later this week.

The UNDP noted that the most disadvantaged people continue to be subject to the biggest impact of environmental degradation.

They are not only vulnerable to the impact of the environment, but also confronted with threats including air pollution, water pollution and sanitation problems.

To measure these serious health, education and living standards deficiencies, the UNDP has taken environmental deprivation into account for the first time in this year's human development index.

The agency has measured environmental deprivation in terms of access to drinking water, clean sanitation or cooking fuel.

"The figures are very shocking," said Jeni Klugman, a lead author of the report.

In developing countries, at least six out of ten people suffer from an element of environmental deprivation while four out of ten suffer from at least two.

In addition, half of the malnutrition cases in the world arise from environmental factors, added the UNDP.

Overall, this year's annual human development ranking showed progress made in the quality of life. However, when adjusted against inequalities among the population, there was an overall drop of 23 percent in the quality of living this year.

"The biggest drops were recorded in education, followed by revenues and health," said Klugman, underlining that all the regions of the world posted a fall in the adjusted indicator.

Norway, Australia, the Netherlands led this year's overall index, while the Democratic Republic of Congo, Niger and Burundi came in at the bottom.

However, when adjusted for inequalities, some countries fell off their top rankings. The United States, for instance, was the fourth best in the index, but only ranked 23rd when adjusted for inequalities.