Greenhouse gas emissions are continuing to rise in Western Australia despite falling across the rest of the nation over the past five years.
A report by the Bankwest Curtin Economics Centre (BCEC) has found that pursuing a "green diversification strategy" could add $16 billion to the state's economy.
It could also create 55,000 jobs - mostly in regional WA - across specialised farming industries and the expansion of scientific services.
The report has identified air pollution, land use, water security and waste management as among the biggest challenges facing the state.
"There is a critical need to address and take action on global warming by significantly reducing greenhouse gases emissions generated by both industries and households," report co-author and BCEC director Alan Duncan said.
"Western Australia's mining sector is responsible for 40 per cent of the state's emissions and while greenhouse gas emissions have been falling nationally, they have risen significantly in WA - growing by 12 per cent in the last five years."
WA's Labor government last year outlined an "aspirational" target of net zero emissions by 2050.
The state's Environmental Protection Authority also released tough new guidelines suggesting major new projects should be carbon-neutral.
But the recommendation was promptly withdrawn following industry backlash and warnings it could jeopardise tens of billions of dollars worth of new LNG projects.
Professor Duncan said WA's emissions strategy should be bolstered to include a "bold but achievable target, backed up by strong policies".
He said further diversification into renewable power generation, lithium mining and processing - all of which have been pursued in recent years - could produce better employment opportunities, particularly in the regions.
Households need to also play their part.
"Ultimately we need to strive to create a circular economy, where all of our resources are stewarded, we get the best value out of our products and services, and nothing is wasted unnecessarily," Prof Duncan said.
The report recommends increasing and expanding the levy on waste sent to landfill, providing incentives for home owners to improve their energy efficiency and encouraging lower household and industry water consumption.
WA's government last week announced it will start banning single-use plastics within three years, a decision applauded by environmental groups.