Urban air pollution is set to become the biggest environmental cause of premature death in the coming decades, overtaking even such mass killers as poor sanitation and a lack of clean drinking water, according to a new report.

Both developed and developing countries will be hit, and by 2050, there could be 3.6 million premature deaths a year from exposure to particulate matter, most of them in China and India. But rich countries will suffer worse effects from exposure to ground-level ozone, because of their ageing populations – older people are more susceptible.

The warning comes in a new report from the Organisation for Economic Cooperation and Development (OECD), which is a study of the global environmental outlook until 2050. The report found four key areas that are of most concern – climate change, loss of biodiversity, water and the health impacts of pollution.

If current policies are allowed to carry on, the world will far exceed the levels of greenhouse gas emissions that scientists say are safe, the report found. "I call it the surrender scenario – where we would be if governments do nothing more than what they have pledged already?" said Simon Upton, environment director at the OECD. "But it could be even worse than that, we've found."

The report said that global greenhouse gas emissions could increase by as much as half, as energy demand rises strongly, if countries fail to use cleaner forms of energy. Water demand is also likely to rise by more than half, and by 2050 as much as 40% of the global population is likely to be living in areas under severe water stress. Groundwater depletion would become the biggest threat to agriculture and to urban water supplies, while pollution from sewage and waste water – including chemicals used in cleaning – will put further strain on supplies.

However, the OECD study alsos said that there are some actions that governments can take quickly to tackle some of the key problems. For instance, many governments treat diesel fuel for vehicles differently than petrol for tax purposes, with tax breaks that encourage the take-up of diesel. But although diesel vehicle fuel produces lower greenhouse gas emissions than petrol, it is far worse for spewing out small particulate matter, which is bad for urban pollution. "In environmental terms, there is no reason to give diesel tax breaks over petrol," said Upton.

Governments could also remove other environmentally harmful subsidies, such as fossil fuel subsidies and subsidies for water that encourage irresponsible use of the resource. Biofuels are another potential danger area, because although they can emit less carbon than conventional fossil fuels, they also contribute to reducing biodiversity and put further strains on water use, so governments should consider carefully whether to go down the biofuels road, Upton warned.

Upton said that if governments took action now, and developed long-term views of these environmental problems, it would give them a much greater chance of avoiding the worst outcomes. "The key thing is that these four biggest problems are interconnnected – biodiversity is affected by climate change and land use, water is linked to health problems, for instance. You can't solve any one of these in isolation. So to be effective, governments have to focus on all of these four and look very closely at the connections between them," he said.