The Swedish PM expects a tough six months steering the EU
Sweden has urged the EU to "pool efforts and show leadership" to secure a global deal to curb climate change.
Swedish PM Fredrik Reinfeldt was briefing the European Parliament on his country's priorities as the new holder of the six-month EU presidency.
"I want to write the story of how the climate threat was averted, together with you," he told newly-elected MEPs.
Sweden wants an EU deal on green measures ahead of a key UN conference on climate change in December.
The Copenhagen conference is already shaping Sweden's priorities.
The new European Parliament, with 736 MEPs, began work on Tuesday.
In the climate change negotiations the EU is wrestling with the problem of burden-sharing - how to spread fairly the cost of switching to a low-carbon economy.
The economic crisis has put huge pressure on state budgets and industry, complicating the introduction of green measures.
Mr Reinfeldt said the challenge was also how to fund green investments in developing countries.
"Time is tight but it is still on our side - but we have to act now," he told the MEPs in Strasbourg. He called tackling climate change "the most vital issue of our generation".
Sweden will hold the EU presidency for six months, under the current rotation system. But if the Lisbon Treaty is finally ratified by all member states the next presidency will run for two-and-a-half years.
Sweden took over the presidency from the Czech Republic on 1 July.
It says it wants the Lisbon Treaty to come into force during its presidency. The next big hurdle is the second Irish referendum, scheduled for 2 October.
Turning to the economic crisis, Mr Reinfeldt said the EU must find a "coordinated exit strategy" because the policy of bailing out ailing financial institutions with taxpayers' money could not continue.
He also stressed the importance of "the social dimension - getting more people into work". "It is unsustainable to have three out of 10 Europeans of working age out of work," he said.
On Tuesday the European Parliament elected former Polish Prime Minister Jerzy Buzek as its new president.
A 69-year-old conservative, he is the first politician from the former communist bloc to chair the parliament.
The elections last month produced an assembly of 736 MEPs with the centre-right forming the biggest bloc.
Mr Buzek will hold the post for two-and-a-half years - half of the parliament's five-year mandate. Under a deal struck before Tuesday's vote, a Socialist MEP will serve as president for the other half.
MEPs will postpone for at least two months a vote on reappointing European Commission chief Jose Manuel Barroso, a veteran Portuguese conservative. Sweden had hoped the vote would happen this week.
Mr Barroso has the support of all 27 member states, but his centre-right allies in the assembly do not have a majority.
EPP - European People's Party (Christian Democrats)
PASDE - Progressive Alliance of Socialists and Democrats in Europe (centre-left)
ALDE - Alliance of Liberals and Democrats for Europe (liberal)
GUE/NGL - European United Left-Nordic Green Left (left-wing)
Greens/EFA - Greens/European Free Alliance (Greens and regionalists/nationalists)
ECR - European Conservatives and Reformists Group (right-wing)
EFD - Europe of Freedom and Democracy (Eurosceptic)
NI - Non-attached (MEPs not part of any group)
These groups may change if new alliances are formed. The number of MEPs will increase to 754 if the Lisbon Treaty comes into force.