Urban and non-urban contributions to the social cost of carbon

Francisco Estrada, Veronica Lupi, W. J. Wouter Botzen & Richard S. J. Tol

Nature Communications |

Abstract

The social cost of carbon (SCC) serves as a concise measure of climate change’s economic impact, often reported at the global and country level. SCC values tend to be disproportionately high for less-developed, populous countries. Previous studies do not distinguish between urban and non-urban areas and ignore the synergies between local and global warming. High exposure and concurrent socioenvironmental problems exacerbate climate change risks in cities. Using a spatially explicit integrated assessment model, the SCC is estimated at USD$187/tCO₂, rising to USD$490/tCO₂ when including urban heat island (UHI) warming. Urban SCC dominates, representing about 78%-93% of the global SCC, due to both urban exposure and the UHI. This finding implies that the highest global greenhouse gases (GHGs) emitters also experience the largest economic losses. Global cities have substantial leverage on climate policy at the national and global scales and strong incentives for a swift transition to a low-carbon economy.

Cite this article

Estrada, F., Lupi, V., Botzen, W.J.W. et al. Urban and non-urban contributions to the social cost of carbon. Nat Commun 16, 4193 (2025). https://doi.org/10.1038/s41467-025-59466-y