In an exclusive London interview with CBS News Early Show co-anchor Harry Smith, Gore said: "What we are facing is a planetary emergency. So some things you would never consider otherwise, it makes sense to consider."
Branson announced the "Earth Challenge" prize Friday morning at a news conference in London with Gore, who served as vice president under Bill Clinton, and then failed in a 2000 White House bid before becoming a vocal environmental activist.
His recent documentary film, "An Inconvenient Truth," is credited with bringing the issues of global warming and carbon emissions much nearer to center-stage in the American media - in addition to creating an Oscar buzz and rumors of Gore being considered for a Nobel Peace Prize.
Branson, chairman of the wildly successful Virgin Group, said the prize will go to whoever comes up with the most innovative way of sucking harmful greenhouse gases out of the atmosphere.
"The Earth cannot wait 60 years. We need everybody capable of discovering an answer to put their minds to it today," Branson said at the news conference. "The Earth cannot wait 60 years."
When Smith asked the men whether their prize campaign might distract attention from the important drive to get politicians onboard the push for a greener planet, Branson acknowledged, "it's going to be a problem to get the political will of, you know, some countries, in particular America, to actually get out there and encourage people to go for smaller cars, to encourage people to use less carbon."
Gore told the Early Show co-anchor that there had been a "big shift" in American public interest in global warming, and that such a shift was the only thing capable of driving a change in the political policy of the country.
"I think you really are going to see change in the way people demand politicians in both parties make this their top priority," Gore said.
But, Branson said if the political will isn't there yet, that's just more evidence that there's an urgent need to give the private sector new incentive to solve to the problem, and that's the goal of the prize money.
Judges of the competition, which applies the basic business theory of creating a huge incentive to get a problem solved, are looking for a method to remove at least one billion tons of carbon from the atmosphere every year.
The judges include a NASA scientist and several top environmental researchers from around the world.
This is not the first time Gore and Branson have joined forces to bring attention to climate change. Gore backed the English tycoon's September 2006 pledge to devote all the profits from his transportation businesses - which include air and rail - to fight global warming.
Branson said that over 10 years, the amount allocated from his business ventures could total $3 billion.