Heavy traffic plagues London streets despite the congestion charge
More than 350 cities across Europe - including 15 in the UK - have signed a "covenant" committing them to cuts of more than 20% in CO2 emissions by 2020.
The "covenant of mayors" was signed at the European Parliament in Brussels.
The EU as a whole aims to achieve a cut of 20% in greenhouse gas emissions by 2020. The CO2 Emissions Trading Scheme (ETS) will play a key role in that.
But the EU's emissions allowances have hit a record low of 9.5 euros (£8; $12) a tonne, undermining the carbon market.
There are fears that the low price weakens the incentive for enterprises to invest in green technologies, because it now costs less for them to pollute.
EU Energy Commissioner Andris Piebalgs remained upbeat on Tuesday, however, estimating that the cities' emissions cuts would save more than 8bn euros in fuel costs annually.
The covenant includes cities in 23 EU countries, among them London, Paris and Madrid. Cities in Switzerland, Norway, Ukraine, Croatia, Turkey and Bosnia-Hercegovina have also signed up.
The commission plans to mobilise European Investment Bank (EIB) credits for the cities involved.
The UK cities involved include Birmingham, Coventry and Nottingham in the Midlands, and all the North-East England councils.
The participating cities will have to submit a sustainable energy action plan in the next 12 months and then report once every two years to their citizens and the commission on the progress made.