"We are going to ask both our finance ministers to go to the (European) Commission as soon as possible to propose to our European partners that all the environmentally-clean products benefit from a reduced VAT," Sarkozy said.

Sarkozy said the Franco-British initiative would allow them to set the example.

"We believe (the initiative) could send out a very important message about what we think of pollution and about what we can do to make for a more energy efficient and environmentally friendly continent," Brown said.

Green goods could range from fridges to insulation materials, said Brown, while Sarkozy said it was wrong that cars that pollute less were more expensive than ordinary vehicles.

An increase in carbon dioxide (CO2) emissions from the United States and Russia more than cancelled out a decline from the 27-nation EU in 2005 compared with 2004.