TORONTO - A British economist known around the world for sounding the fiscal alarm on climate change made a one-day stop in Canada on Monday to "strongly'' present his case that environmental stewardship need not mean a stagnant economy.

With the debate on Canada's Kyoto obligations centred on whether the economy can withstand a dramatic curtailing of emissions, Nicholas Stern minced no words as he argued that the "costs of action . . . are much less than the costs of inaction.''

"The story is that the rich countries have a big responsibility . . . a responsibility of leadership,'' Stern said following a luncheon speech to about 500 business and political leaders.

"It's very clear to me now that you can be green and grow. I do not think it's a horse race between growth and being responsible on climate change -- good policy can give us both.''

While the Conservative government has gone to great lengths of late to cast itself as concerned about green issues, Prime Minister Stephen Harper faces opposition rivals determined to ensure Canada honour its commitments to reduce greenhouse gases under the Kyoto protocol.

Canada has not formally withdrawn from the accord, but the Conservatives have reneged on Canada's commitment to meet greenhouse-gas reduction targets. Environment Minister John Baird, who spoke by phone Monday with Stern, has said the targets can't be achieved without causing economic collapse.

"We argue in the report that (countries can reduce emissions) without damaging their growth and, in some perspectives, improve their growth,'' Stern said in reference to his 700-page Stern Review, tabled last October for the British government.

Anticipating his scheduled phone chat with Baird, Stern said: "I'll be making the point strongly that there's a harmony between being responsible from the point of view of . . . moving to a low carbon path and economic growth itself.''

Speaking outside the Commons before his telephone conversation with Stern, Baird said the economic benefits of climate change will only accrue to Canada if the necessary investments are made inside the country.

"There is going to be a considerable amount of economic activity as a result of access to tackle climate change, but you only get the economic activity if you make investments here in Canada,'' Baird said.

After the Baird-Stern call, Baird's office released a statement saying Canada will work with international partners "to take real action to combat climate change.''

Central to Stern's argument is an international emissions trading system, which would see wealthy nations sending billions of dollars to support low-carbon development abroad -- a scheme Baird said he opposes.

"Rather than sending five or 10 billion dollars overseas to Russia to buy hot air credit . . . we rather believe to make those investments in Canada, which we're committed to.''

Cutting worldwide greenhouse emissions to acceptable levels will cost just one per cent of global GDP by 2050, Stern's report says, while failing to do so could cost up to 20 per cent -- which would amount to trillions of dollars.

Liberal Leader Stephane Dion, in a statement issued after meeting with Stern, said "Canada does not have the luxury of standing still.''

"We either act using our Kyoto commitment to spur companies to innovate or we do nothing and suffer the economic consequences,'' Dion said.

Although Dion and Ontario Premier Dalton McGuinty were among the leaders Stern met Monday, the bespectacled and congenial economist insisted he wasn't "here to make pitches.''

"I want to explain the conclusions we came to as a result of studying the economics of climate change,'' Stern, dressed in a dark navy suit with his hands folded before him, told a morning news conference.

"One of the things that I emphasize when I meet decision makers in any country is the urgency of the situation.''

Stern, a former chief economist for the World Bank who has become an unlikely celebrity since his report was released, has compared the potential costs of climate change to those of the world wars and the Great Depression.

Canada's membership in the G8 and its reputation as a "technological leader in natural resources'' means it "has a great deal to contribute to this discussion,'' said Stern.

"I feel confident that it will, both in terms of analysis of policies and in terms of action.''