"More people in the world need to move from speech to action when it comes to handling the environment and climate issues," said the King.
He added that Sweden "has an important part to play in this mission."
"I have participated in many meetings about the environment and the importance of sustainability. We want future generations to be able to breathe fresh air and drink clean water. And so we have to find new ways for our Earth to function in the future, too."
The King also spoke of the challenges facing Sweden in the current turbulent financial climate.
He took the opportunity to thank Swedes for their well-wishes on the occasion of the birth of his granddaughter, Princess Estelle, in February.
"To become a grandfather and a grandmother was a big occasion for Queen Silvia and I", said the King.
He said he is now looking forward to a new year with new opportunities.
"We are especially pleased for Princess Madeleine and Christopher O'Neill and their coming wedding."
Last week, the Royal Court confirmed that Madeleine and Christopher will marry on June 8th in Stockholm's Royal Palace church (Slottskyrkan).
In 2013, the King will celebrate 40 years as Head of State. He and the Queen will visit all counties of Sweden as part of the anniversary celebrations.
The King's Christmas Day speech is a Swedish tradition dating back to 1938. It was introduced by Prince Wilhelm and is broadcast on Sveriges Radio, Sweden's public service radio.
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