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.

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 are 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.

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.