Directorate for Public Governance and Territorial Development

Cities and Climate Change


Key policy issues | Table of contents | How to obtain this book 


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Pages 276


As the hubs of economic activity, cities drive the vast majority of the world’s energy use and are major contributors to global greenhouse gas emissions. Because they are home to major infrastructure and highly concentrated populations, cities are also vulnerable to the impacts of climate change, such as rising sea levels, warmer temperatures and fiercer storms. At the same time, better urban planning and policies can reduce energy use and greenhouse gas emissions and improve the resilience of urban infrastructure to climate change, thus shaping future trends. 

This book shows how city and metropolitan regional governments working in tandem with national governments can change the way we think about responding to climate change. The chapters analyse: trends in urbanisation, economic growth, energy use and climate change; the economic benefits of climate action; the role of urban policies in reducing energy demand, improving resilience to climate change and complementing global climate policies;  frameworks for multi-level governance of climate change including engagement with relevant stakeholders; and the contribution of cities to “green growth”, including the “greening” of fiscal policies, innovation and jobs. The book also explores policy tools and best practices from both OECD and some non-member countries.

Cities and Climate Change reveals the importance of addressing climate change across all levels of government. Local involvement through “climate-conscious” urban planning and management can help achieve national climate goals and minimise tradeoffs between environmental and economic priorities at local levels. The book will be relevant to policy makers, researchers, and others with an interest in learning more about urbanisation and climate change policy.



Key policy issues

  • Cities are major contributors to CO2. Roughly half of the world’s population lives in urban areas, and this share is projected to reach 60% by 2030. Cities consume  between 60 to 80%  of energy production worldwide and account for a roughly equivalent share of global CO2 emissions.
  • Cities are also highly vulnerable to climate change change. Many of the world’s largest cities are located in coastal areas. This increases their vulnerability to rising sea levels and storm surges, risking livelihoods, property, and urban infrastructure. Heat waves will be more intense in urban areas due to urban heat island effects.
  • Cities policies and urban action are part of the climate solution. How cities grow and operate influences energy demand and thus greenhouse gas emissions. Lifestyles, spatial form and public transport availability are also crucial. Urban policies (e.g. densification or congestion charges) can complement global climate policies (e.g. linked-up cap and trade systems) and reduce the overall cost of emissions abatement. 
  • Robust frameworks for multi-level governance and enabling national policies will advance climate actions. Local authorities can help achieve national climate goals through urban policies to reduce energy demand and improve resilience to climate change National governments can help create a sound institutional foundation and knowledge base to support local decision makers engage with stakeholders to identify and carry out cost-effective actions.
  • Cities and regions must play a key role in fostering the green growth agenda. Cities are policy laboratories for action on climate change. Urban governments are taking serious action on climate change – even in the absence of national policies – through local regulations, urban services, programme administration, and city purchasing and property management. Cities can stimulate green jobs by raising consumer awareness, raising the eco-efficiency of local business, facilitating cleantech start-ups and supporting training programmes.


Table of contents


Chapter 1. Urbanisation, Economic Growth and Climate Change

This chapter analyses the relationship between cities and climate change and shows that it is not cities, nor urbanisation per se, that contribute to greenhouse gas emissions, but rather the way in which people move around the city, the sprawling growth patterns they adopt, the way in which people use energy at home and how buildings are heated and cooled that make cities the great consumers of energy and polluters that they are. Cities’ emissions can thus vary greatly depending on lifestyles, spatial form, public transport availability and the sources of their energy.

Chapter 2. Climate Change Impacts Specific to Urban Regions

This chapter discusses climate impacts specific to urban areas. If urban growth and development patterns are contributing to the increase in GHG emissions, urban population and infrastructure is also increasingly at risk to detrimental effects of climate change. The fixed or long term nature of urban infrastructure already in place, and the long lead times for planning new urban infrastructure, renders it complex to address the impacts of rising temperatures and sea levels as well as changing precipitation patterns that climate change will bring, particularly given the uncertainties of local and regional climate predictions. Furthermore, a large share of the world’s urban centres are located in low-lying coastal areas which are particularly vulnerable to storm surge and water-related calamities, increasing the risk to property, livelihoods and urban infrastructure. Although it is well understood that climate change will have impacts on urban infrastructure and populations in developed and developing countries, adaptation policies at the local level have lagged behind mitigation actions.


Chapter 3. Economic Benefits of Climate Action: The Urban Dimension

This chapter examines the benefits of implementing urban policies to tackle climate change. Findings from a computable general equilibrium model (IMACLIM-R) that incorporates an urban module and data from the OECD Metropolitan Database demonstrate that the traditionally perceived trade-off between economic growth and achieving mitigation objectives (observed at a macroeconomic level) can be alleviated when urban policies are introduced. Under a policy scenario where national emission reduction strategies are implemented, aggregate mitigation costs can be reduced if economy-wide environmental policies are complemented by urban policies, such as congestion charges or increasing spatial density. This is due to complementarities with other policy objectives, such as lower local pollution and health benefits, and enhancement of city attractiveness and competitiveness through lower local pollution levels. The chapter also discusses other types of local benefits of climate change policies, including quality of life, increased efficiency, energy security, and infrastructure improvements.

Annex 3.A1. Computable General Equilibrium Model of cities and Climate Change: IMACLIM-R and OECD Metropolitan Database


Chapter 4. The Urban Policy Package

While the international community has been struggling to agree on climate change targets and coordinated approaches to fight global warming, and many national governments have begun to act, a growing number of cities and regions have also taken initiatives to reduce their energy use and GHG emissions and to begin to adapt to climate change. Cities and regions in many OECD countries have key responsibilities in the urban sectors that can provide valuable strategies for fighting and adapting to climate change, including policies that affect transportation and the built environment. With the help of strategic planning tools, policies at the local level can establish complementary policy packages that bring together territorial strategies and sectoral policies. Chapter 4 reviews policy tools to address climate change at the local level in the sectors of land-use zoning, natural resources, transportation, building, waste and water. The question of effective urban policy packages intersects with the concept of urban spatial density, a major driver of CO2 and N2O emissions. This chapter also assesses different characteristics of urban densification policies and their effectiveness in meeting environmental goals whilst ensuring that cities remain attractive in the long term.

Chapter 5. Contribution of Cities to a Green Growth Model

Environmental policies that do not also support growth will not be sustainable over the long term. Chapter 5 discusses the role of cities in contributing to a new global green growth model at a time when governments must reduce their carbon footprint while pursuing economic growth and job creation.The chapter highlights the main policy areas through which city and regional governments can contribute to green growth objectives, including developing and maintaining green public infrastructure, improving the eco-efficiency of production, boosting demand by fostering the greening of consumption preferences and facilitating green innovation. Tools need to be developed for assessing the effectiveness of such policies in reaching their objectives of job creation and output growth and the chapter provides a first step through an analytical framework that can orient future research on this crucial issue.


Chapter 6. Multi-level Governance: A Conceptual Framework

As cities and national governments cannot act alone to effectively tackle climate change, a framework for understanding the linkages across multiple levels of government and with the private sector and non-governmental stakeholders is needed. Chapter 6 proposes a multi-level governance framework that explores these linkages between national, regional and local policies to address climate change. Such a framework identifies vertical governance between different levels of government, as well as horizontal governance across multiple sectors at the same level of government, including engagement with non-governmental actors, and governance across and between cities or territories. It lays out a framework to explore, “what is good practice?” in the area of multi-level governance and climate change, laying out a number of sub-themes and questions for investigation in Part III of the book.


Chapter 7. Local and Regional Governance

Each stage of the local policy-making process presents an opportunity to incorporate climate change priorities, agenda setting, policy design, implementation and policy evaluation. Chapter 7 discusses these opportunities, and the issues for horizontal coordination that they raise. Coordination across city departments as well as across municipalities in the same metropolitan region is needed to implement climate policies in a cross-sectoral manner. Coordination among cities and surrounding municipalities is especially crucial given that many urban initiatives to mitigate and adapt to climate change require changes that are broader than just one city’s jurisdiction. While some municipal governments have led the way to coordinate climate change action at the metropolitan regional level, greater incentives and more effective coordination mechanisms are needed. Regional initiatives can have a broader impact on climate priorities given their scale and potentially greater access to funding and technical expertise.


Chapter 8. Local-National Climate Policy Linkages

Chapter 8 reviews the vertical dimension of climate governance, focusing on local-national interactions and coordination in the development of climate policy. Multi-level governance is a critical issue for national governments, the large majority of which have agreed to work together to reduce greenhouse gas emissions and to adapt to inevitable climate change. A key issue for national policy makers is what they can do to empower cities to become more effective in the design and implementation of policies for mitigation and adaptation to climate change and to take advantage of the opportunities to learn from city-scale experimentation and action. These include policies driven from the top by national or regional governments as well as from the bottom-up by local policy approaches and innovations that may subsequently be scaled up to regional or national responses. A hybrid of the two frameworks provides top-down incentives and guidance while leaving room for city-level leadership and innovation. Partnerships with the private sector are shown to be an important feature in hybrid frameworks. Climate priorities also call on national governments to integrate mitigation and adaptation goals into national regional development policy frameworks, although only a few countries can provide successful models for climate-sensitive regional development policy.


Chapter 9. Financial Instruments and Funding New Expenditure Needs

Measures to reduce greenhouse gas emissions and adapt to expected climate change impacts will put additional pressure on city budgets and increase the need for additional public resources. Chapter 9 discusses opportunities to reform existing sub-national and national revenue sources as well as new forms of financing for urban climate change initiatives. A number of existing fiscal instruments and incentives are already at cities’ disposal, including taxes, fees and grants, and these could be considered as instruments for achieving climate change and urban sustainability goals. Carbon markets and access to financial capital may emerge as promising new funding sources, particularly if national and international policy makers decide to adapt them to better accommodate the multi-sectoral nature of many urban mitigation projects.


Chapter 10. Building Institutions to Enhance Local Knowledge and Strengthen Action

Looking ahead, new or reformed institutions are needed to enable national governments to facilitate capacity building and decision-making on climate change at the local level. Chapter 10 reviews key institutional priorities for greater engagement of local decision makers, the private sector and civil society stakeholders in developing local knowledge to address climate change. City authorities are in a unique position to effectively engage local stakeholders and to design and implement locally tailored responses to climate change. Key institutional shifts could include the development of a number of tools to support local decision-making.  These could include standardised greenhouse gas emission inventory and reporting protocols to allow cities to monitor progress in reducing emissions in a way that is harmonised and comparable with other cities and national approaches.   This is an important first step to enable cities to better access and participate in international carbon markets and to raise the visibility and credibility of urban mitigation efforts at national and international levels. In addition, regional science and policy networks can be strengthened to allow for expert climate information and local knowledge to combine to better understand how climate change will affect local areas as well as local opportunities for mitigation. Finally, strengthening urban climate policy networks may be a means to provide a forum for information exchange among city practitioners and other stakeholders, and to establish a common understanding about targets, implementation strategies and monitoring.


How to obtain this book

Readers can access the full version of Cities and Climate Change by choosing from the following options:


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