The greenhouse effect caused by carbon dioxide on a global scale, is repeated locally in the city. It simply transports the heat to the exterior, worsening the problem. The engines contribute to local warming, too. One third is released via the cooling system, heating the air. Partly, this energy is dissipated by the tires and by the surrounding air.
Dissipation causes warming.
The rest, which is converted to kinetic energy, is dissipated when the vehicle is stopped. In terms of heat, driving a car is like pouring gasoline in the street and lighting it. All the gas used by all the cars - a pretty good fire. Add the time people lose when being in traffic jams and the time lost while people recover from injuries after traffic accidents. All this time means a loss for economy.