The author of the Government's 2006 report on climate change said that spending money on renewable and low-carbon industries could help stimulate the economy during a recession and when oil prices were high.

"We're going to have to grow out of this... and this is an area which looks as though it could well grow strongly and with the right support could be one of the major engines of growth," Lord Stern told The Guardian.

He said that the current financial crisis demonstrated the consequences of not dealing with dangerous risks early enough and with sufficient international co-operation.

Warning that there were "two kinds of danger" posed to efforts to tackle climate change by the present fear of recession, Lord Stern said: "One is people can only concentrate on a limited number of things at the same time.

"The second is people will be sensitive to cost increases, and those will have to be managed carefully... There's a danger: it needs leadership."

Lord Stern's comments came as MEPs prepared to vote on Europe's controversial climate change plans, which face a tough test in the face of the financial crisis.

The plan, which was drawn up before the present crisis struck, is for an EU commitment to cut greenhouse gases by 20 per cent by 2020 - and by 30 per cent if the rest of the developed world promises to do the same.

But some governments are now pleading on behalf of key domestic industries that the emissions cuts would be too harsh coming amid the pain for businesses caused by market turmoil.

However, following weeks of argument, the European Parliament's Environment Committee is still expected to endorse the target.

The Committee will also pass judgment on plans to step up Europe's Emissions Trading Scheme, which caps overall carbon dioxide emissions and gives industries limited annual emissions allowances.