Cities can drive better economic growth while also reducing climate risk. They are at the forefront of the fight to protect the climate and eradicate poverty, and are often trailblazers in a world in which nation states typically move more slowly to address global challenges. These are the crucial conclusions from a series of studies released this week by the Global Commission on the Economy and Climate, which draws from examples worldwide, including cities as diverse as Lima, Peru and Leeds, UK.

Business-as-usual urbanization is creating huge economic and social costs. Traffic congestion, for example, costs 3.4% of GDP in Buenos Aires and 2.6% in Mexico City. In Beijing, the social costs of motorized transport – including air pollution and congestion – are as high as 15% of GDP. Urban sprawl in the United States adds some US$ 400 billion in extra costs each year as a result of higher infrastructure, public service delivery, and transport costs.

Graham Floater of LSE Cities highlights the scale of the opportunity and the risks of inaction, “over the next two decades, cities will grow by over a billion people and generate two thirds of global economic growth. If this rapid urban growth is managed badly, we face a world of sprawling, inefficient, polluted cities – and a major climate change risk.”

Given the long-lived nature of urban infrastructure, the way in which we build, rebuild, maintain and enhance the world’s growing cities will not only determine their economic performance and their citizens’ quality of life; it will also define the trajectory of global greenhouse gas (GHG) emissions for much of the rest of the century.

Cities lead the way on low-carbon economic growth

So, how can cities realize opportunities for better economic growth that creates a safer climate? Connected, compact, and coordinated development is the central model to low-carbon economic growth. Connected infrastructure requires investment in innovative urban infrastructure and technology, with a focus on smarter transport systems. Compact urban growth means managed expansion that encourages higher-density living and walkable, local urban environments. While coordinated governance needs effective and accountable institutions to support better planning and implementation – which is particularly important for transport.

Pete Erikson – an author of one of the studies – suggests reasons to be optimistic about city leadership. “Cities are playing an increasingly important role in climate change mitigation, showing leadership and creativity and demonstrating that there is plenty of overlap between good economic development and emissions reduction.”

Indeed, cities around the world are leading the way. In Curitiba, Brazil – where per capita emissions are about 25% lower than Brazil’s urban average – bus rapid transit (BRT), in conjunction with improved cycling and pedestrian infrastructure and land-use policies has reduced gasoline consumption and income spent on transport. While in Europe, Stockholm reduced emissions by 35% from 1993 to 2010, but grew its economy by 41%. Car ownership in London decreased 6% from 1995 to 2011, while the city’s economy grew by 40%. In Asia, Beijing is helping reverse China’s trend of sprawling cities, with density in the city’s core increasing by 50% over the past decade.

And there are striking opportunities to take things further and build better, smarter cities that people want to live in. Adopting low-carbon technologies – such as new building technologies and electric buses – across 30 megacities like Mumbai or Beijing could create more than two million jobs, while avoiding three billion tons of cumulative GHG emissions. These technologies also have the potential to reduce local air pollution, meaning healthier, happier citizens.

Lima – which next week hosts global climate negotiations – currently has over seven million inhabitants and is one of the fastest growing cities in Latin America. However, this growth hasn’t always been well-managed and visitors to the city next week will see that its transport systems are far from perfect, though they are improving. Lima’s investments in BRT and the metro network, combined with new emissions standards are expected to reduce emissions from the transport sector by 15% by 2025 compared to business as usual.

Cities face a critical juncture in their growth

Without further action in cities worldwide, there is a real risk of substantial increases in energy bills – which will be bad for the poor – and more GHG emissions – which will be bad for the climate. However, connected, compact, and coordinated governments pave the way for low-carbon growth. New work by the Commission estimates that more connected, compact urban development could reduce global urban infrastructure requirements by more than US$ 3 trillion between 2015 and 2030.

Commenting on the reports, Lima’s Mayor Susana Villarán said: “The challenge of supporting economic growth and tackling climate change will be met in the world’s cities. Investing in public transport is good for citizens, good for business and good for the climate. Clear leadership is now needed.”