relationship between population density and CO2 emissions. The relationship is positive at very low incomes, but becomes negative at higher incomes. Our income results provide the first test of an Environmental Kuznets Curve relationship based on actual CO2 observations. With caveats about potential simultaneity problems, we find evidence for an EKC that reaches a peak in the range [$40,000 - $50,000] per capita, which is above the 90th percentile internationally.

We should note that our EKC results are only intended to provide a benchmark for judging future urban performance in reducing CO2 emissions. The same would be true if we had found a linear emissions/income relationship. We should also emphasize that our EKC results have no normative or policy implications in themselves. They do not imply that additional public resources are not needed for reducing CO2 emissions because “the problem will take care of itself” with continued economic growth. In fact, the opposite is true. Waiting for the EKC to reduce emissions from all countries would produce an enormous increase in cumulative CO2 and a potentially-catastrophic global temperature increase.

We explore other implications of our estimates in a series of exercises. Model-based predictions provide expected CO2 concentration anomalies for cities, given their sectoral, demographic, economic and geographic characteristics. We map the expected concentration anomalies and regression residuals for the 1,236 sample cities, using the residuals to index CO2 emissions performance that exceeds or falls short of model-based expectations. Among cities, we find wide variation in performance among cities within regions, as well as significant differences across regions. Overall city performance exceeds 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: Industry, Fires, Income (the component that is uncorrelated with Industry), Population and Climate. We find particularly important roles for Industry in India, China and other East Asia & Pacific countries; Fires in Sub-Saharan Africa; Income (the component uncorrelated with Industry) in Latin America & Caribbean, North America and Western Europe; Population in Sub-Saharan Africa, India and other South Asia 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 this 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 explored in future research.

To conclude, this paper offers a response to the World Bank’s new climate change mandate, which requires new metrics for judging progress in CO2 emissions reduction. We demonstrate that satellite-based CO2 measures can contribute by enabling rigorous analysis and performance assessment for all global cities and regions. We have estimated a CO2 emissions model for 1,236 cities with populations greater than 500,000, but our 10 km grid covers all terrestrial areas of the 35