Adopting more compact, connected and efficient urban development would pay for itself within 16 years, according to the latest report from the New Climate Economy (NCE).
Investing in low emission public transport, making buildings more energy efficient and improving waste management in cities could generate savings of $17 trillion by 2050, the study found.
If measures to boost low-carbon innovation and reduce fossil fuel subsidies, coupled with the introduction of carbon pricing, were also pursued, the potential savings could rise to $22 trillion.
The report highlights how more compact, connected and efficient urban development would stimulate economic activity, attract investment, improve air quality and public health, enhance safety and reduce poverty.
It outlines ideas for investment in energy efficiency, waste and transport across the world's 500 largest cities that could make a significant contribution to climate change mitigation by reducing greenhouse-gas emissions by 3.7 trillion gigatonnes of CO2 a year by 2030.
However, the NCE recognises that many cities lack the skills to achieve low-carbon development, and recommends greater international collaboration through existing frameworks, such as the Compact of Mayors.
The compact encourages cities to take ambitious local action on climate change and report it through a standardised methodology. Eighty cities are currently members and the NCE recommends that the international community of international development agencies, city networks and multilateral and regional development banks should support at least the world's largest 500 cities by population to comply with the compact by 2020.
The report emphasises the importance of standard frameworks, methodologies and reporting platforms to increase the credibility of cities' climate commitments. This can unlock technical and financial assistance from supporting institutions, including multilateral development banks and agencies, it states.
A survey by the NCE of more than 100 cities found that 60 had published data on their carbon emissions, but that only 29 of these had broken down the data by scope and sector, and most of the information was not comparable.
As a result, many cities are unable to set out evidence-based plans for low-carbon action to to be formally included in their countries' intended nationally determined contributions (INDCs), it said. INDCs must be submitted to the UNFCCC ahead of the Paris climate summit at the end of the year.
The international community could also help city authorities access finance from the private sector, the report suggests. It can do this by providing technical assistance to help identify, develop and implement "investment-ready" programmes or projects.
It could also help cities improve their creditworthiness so that they can mobilise resources in both domestic and international financial markets through programmes such as the World Bank-led creditworthiness initiative and the cities climate finance leadership alliance.
"The steps that cities take to shrink their carbon footprints also reduce their energy costs, improve public health, and help them attract new residents and businesses," said Michael Bloomberg, UN secretary-general special envoy for cities and climate change.
"This report can help accelerate the progress cities are making in all of these areas, by highlighting smart policies and encouraging cooperation through efforts like the Compact of Mayors," he added.
