By Darren Waters
Technology editor, BBC News website
Google is backing fuel-efficient, hybrid cars as part of a plan to make the entire firm carbon neutral by 2008.
Google believes its example will help the market develop
The company's philanthropic arm, Google.org, will give $1m in grants to encourage the adoption of hybrids.
It has pledged a further $10m to help commercialise plug-in hybrids and fully electric vehicles.
"We believe our support can stimulate public consumption," said Urs Hoelzle, Google's operations senior vice president.
"These types of cars could make a big difference in how much carbon they produce," he added.
The firm said the hybrid vehicles produced 65% fewer CO2 emissions than the average car in Europe.
Google's own fleet will be converted to hybrid technology and the firm will look for grant proposals to promote further use of fuel-efficient cars later in the year.
Google said it was investing in renewable energy sources and offsetting emissions that could not be eliminated directly, in order to go carbon neutral.
The US web giant announced it had finished phase one of a 1.6-megawatt solar panel system at its headquarters in Mountain View, California.
It will provide almost a third of the HQ's energy needs. The firm has also committed to creating an additional 50 megawatts of renewable energy by 2012 - enough to power 50,000 homes.
Google said it would employ data centres that used less than half the energy of standard industry data centres.
Mr Hoelzle added: "We don't just want to be carbon neutral. Hopefully, we will have a positive impact on the larger environment.
"We want to first take care of our own energy efficiency and renewable energy, but also to reach to the world as whole.
"We want to make computers more effective, through the Climate Savers Computing Initiative (CSCI) and working with environmentalists and policy makers."
The company has installed solar panels at its Mountain View HQ
Google co-founded the CSCI as an industry initiative to increase computer efficiency and cut carbon emissions by 54 million tonnes by 2010; and has joined a lobby organisation, the Climate Group.
Google will not reveal the size of its carbon footprint. However, it says the footprint will be independently verified.
Mr Hoelzle said: "I don't think we will publish absolute numbers - we are still in heavy competition with other companies, and as an internet company your infrastructure that runs services is one of the key weapons you have.
"None of our competitors has released numbers."