# **Summary**

This paper estimates an urban CO2 emissions model using satellite-measured CO2 concentrations from 2014 to 2020, for 1,236 cities in 138 countries. The model incorporates the global trend in CO2 concentration, seasonal fluctuations by hemisphere, and a large set of georeferenced variables that incorporate CO2-intensive industry structure, emissions from agricultural and forest fires in neighboring areas, demography, the component of income that is uncorrelated with industry structure, and relevant geographic conditions. The income results provide the first test of an Environmental Kuznets Curve relationship for CO2 based on actual observations. 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 find that economic development has a significant effect on the direction of the relationship between population density and CO2 emissions. The relationship is positive at very low incomes, but becomes negative at higher incomes.

We explore other implications of our estimates in a series of exercises. Using cities’ mean regression residuals to index their CO2 emissions performance, we find wide variation within and across regions. Overall performance exceeds model-based expectations in India, Western Europe and the former Comecon countries, while it falls short in China, the rest of East Asia & Pacific, Middle East & North Africa and Sub-Saharan Africa. We also decompose model CO2 predictions into five broad source categories for each city. We find particularly important roles for CO2-intensive industry structure in India, China and other East Asia & Pacific countries; agricultural and forestclearing fires in Sub-Saharan Africa; the component of income per capita that is uncorrelated with industry structure in Latin America & Caribbean, North America and Western Europe; population and population density in Sub-Saharan Africa, India and other South Asian countries; and climate in the former Comecon countries.

Our results can also inform the discussion of policy instruments for CO2 emissions reduction. Many policy analysts who support Pigouvian pricing also argue for a non-Pigouvian supplement: coordinated public investment in low-carbon land development, energy and transport that will accelerate the transition to low-carbon economies. We explore the non-Pigouvian proposition for subway investments, drawing on a recent global survey of subway systems. We divide our 1,236 regression residuals into deciles, with the largest negative residuals in the first decile, and identify the subset of 132 global subway cities in each decile. We find that subway cities are four times more numerous among first-decile cities than among tenth-decile cities. We also find that representation of subway cities declines steadily across deciles. While these results provide strong suggestive support for the non-Pigouvian view, they are subject to potential endogeneity that should be considered in future research.

This research is only one of many potential applications for our global CO2 database, which covers all terrestrial areas at 10 km resolution. The same CO2 emissions model could be used to track progress for large and small cities within subregions or countries, subregions within countries, or project areas.

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