By 2050, almost two-thirds of the world’s population will live in cities, which already consume most of the world’s energy and emit the majority of greenhouse gases. This makes urban areas central to both the causes of climate change and the solutions.

The white paper argues that decarbonizing cities is not only environmental policy, but a strategic industrial agenda. It introduces the “city-industry-climate nexus,” where infrastructure, production systems, value chains, and climate action converge.

Cities host the industries that supply cement, steel, food, textiles, logistics, and waste services—sectors responsible for a significant share of global emissions. At the same time, cities face rising heat, water stress, extreme weather, social inequality, and rapid urbanization, especially in low- and middle-income countries. Despite growing responsibility, climate governance frameworks still treat cities primarily as implementers rather than decision-makers. Limited finance, regulatory misalignment, and technical capacity further restrict municipal action.

The white paper proposes strengthening urban industrial decarbonization through municipal finance reform, market incentives, green public procurement, and innovation ecosystems. It emphasizes support for MSMEs, start-ups, and green skills as core to local transformation.

UNIDO’s approach integrates policy, technology, finance, partnerships, capacity building, and data across energy, mobility, buildings, waste, and water systems. The report calls for treating cities as economic agents and co-leaders of national and global climate strategies. It argues that investing in urban decarbonization can drive competitiveness, resilience, and job creation. The future of net-zero transitions will be determined in cities, and coordinated action across governments, industry, and development institutions will be essential.