What impact can local economic development in cities have on global GHG emissions? Assessing the evidence

City governments are increasingly taking an active role in economic development, working to attract and retain businesses. Urban leaders around the world have different resources, strengths and priorities, but cities’ economic development and competitiveness efforts share many common elements. For example, they often focus on creating an attractive environment to live, work and grow businesses, and they often invest in enhanced infrastructure and improved public services.

By 2030, the share of people living in urban areas is expected to rise to about 60%, from just over half today. City leaders’ ability to build vibrant, prosperous communities will thus play a decisive role in the economic and social well-being of billions of people. As economic hubs, cities also have a crucial role to play in mitigating global climate change. Cities at all levels are pursuing climate action, and many of the measures they are choosing – e.g. increasing building energy efficiency, and improving public transit – have also been shown to have broader economic and social benefits.

This paper looks at this issue in the other direction, examining the potential GHG impact of policies and actions that are already widely used by cities to advance economic development and competitiveness.

It finds that by 2030, with a population of 5 billion people, cities could produce nearly 8 billion tonnes CO2 from building heating and cooling and personal vehicle use alone. A shift to more compact, transit-oriented urban forms could have economic benefits and reduce emissions by about 0.6 billion tonnes CO2 in 2030, and make subsequent GHG reductions more cost-effective and achievable. In contrast, a continuation of car-centric, sprawling development could fail to realize the economic efficiency of compact forms and tend to lock in a higher trajectory for carbon emissions, rendering future mitigation more challenging and costly.

Additional findings include:
• Attractive, well-functioning urban infrastructure and services are key enablers for delivering the GHG and economic benefits of a compact urban form.
• City-scale emission reductions will not always yield global-scale emission reductions.
• Several measures to reduce urban air pollution can also reduce global GHG emissions, particularly those that focus on energy efficiency, reducing coal use, and increasing renewable energy.
• Cities wanting to maximize their contributions to global GHG emission reductions will need to address emissions associated with consumption of goods and services.

Download the paper (PDF, 283kb)

Note: An earlier version of this paper was circulated at the New Climate Economy launch event in Sweden.