# **1.  Introduction**

The World Meteorological Organization forecasts that the current greenhouse gas (GHG) emissions trend will increase global temperature by 3-5 degrees C by 2100 (Reuters 2018). This would far overshoot the 2-degree limit pledged by the 2015 Paris climate accord (COP 21) and might have a catastrophic impact (Steffen et al. 2018; World Bank 2012). In response, several industrial nations pledged very steep emissions reductions at the recent Leaders’ Summit on Climate (April 22-23, 2021).

On April 2, 2021, the President of the World Bank responded with a new Climate Change Action Plan (World Bank 2021) that expands participation in large-scale climate finance and commits the World Bank to align all new World Bank operations with the objectives of the Paris Agreement by July 1, 2023. IFC and MIGA will align 85% of new operations by July 1, 2023 and 100% by July 1, 2025. The announcement highlights the need for new metrics to achieve impact by measuring GHG emissions reductions. In this context, this paper makes four contributions to the knowledge base on GHG emissions and underlying drivers.

First, the Climate Change Action Plan confronts a striking information shortfall at the outset: neartotal absence of directly-measured local and regional GHG data for problem diagnosis, program design and performance assessment. In the global arena, consistently-measured GHG estimates are only available for about 80 urban areas, and over half of those are in developed countries (C40 2021). In addition, few of the available estimates incorporate actual GHG emissions. Most rely on emissions parameters from engineering studies, which are applied to survey-based activity measures for transport, energy production and manufacturing. Standard engineering estimates are particularly suspect for developing countries, because many of the parameters have been calibrated using databases and models developed for high-income economies.

Recently, the advent of satellite-based GHG measurement has greatly expanded the potential for empirical assessment. High-resolution observations of atmospheric GHG concentrations are now available from several platforms, including NASA’s OCO-2 and OCO-3 instruments, the European Space Agency’s METOP-A and TROPOMI (Sentinel-5P) platforms, and the Japan Space Exploration Agency’s GOSAT and GOSAT-2. Detailed technical assessments of measures from these platforms have verified that they provide useful and comprehensive information for global carbon emissions analysis (Pan et al. 2021; Wu et al. 2020; Labzovskii et al. 2019). Along with research verification, the first global satellite-based GHG studies have begun to emerge for small samples of cities (e.g., Wu et al. 2020).

In this paper, we extend the domain for analysis with a panel of satellite-measured CO2 concentrations for 1,236 urban areas with populations greater than 500,000. The database covers the period 2014-2020 and includes cities in 138 countries in Africa (41), the Americas (22), Asia (44), Europe (29) and Oceania (2).

Second, we provide the first test of an Environmental Kuznets Curve (EKC) relationship for CO2 based on actual observations. We specify an econometric model of cities’ atmospheric CO2 concentrations that incorporates a large set of georeferenced determinants. We find evidence for an EKC that reaches a peak near or above $40,000 per capita, which is at the 90th percentile internationally. We also explore the relationship between population density and urban CO2 emissions at different levels of economic development.

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