OECD Regions and Cities at a Glance 2024

Many OECD regions and functional urban areas (FUAs) are still far from 2050 net zero targets, as production-based emissions have increased in close to 40% of large OECD regions since 2010

In 2022, global emissions soared to an unprecedented level of 52.4 gigatonnes of carbon dioxide equivalent (Gt CO₂-eq), 61% higher than in 1990. In this context, many OECD countries have adopted ambitious emissions reduction plans to reach climate neutrality. According to the International Energy Agency (IEA) Net Zero Emissions Scenario, production-based GHG emissions would need to drop to below 4.7 t CO₂-eq per capita by 2030 in OECD countries. In 2022, only around 2 out of 10 OECD large regions (81 out of 433) and 4 out of 10 OECD FUAs (506 out of 1 248) had emissions lower than this level. Indeed, around 80% of regions and 60% of FUAs had roughly twice that level of emissions in 2022. Moreover, 57 OECD regions and 77 FUAs recorded emissions higher than 20 t CO₂-eq per inhabitant in 2022.

Emissions in OECD countries have been falling since their peak in 2007, although progress varies widely across regions. From 2010 to 2022, emissions dropped more quickly in metropolitan regions and regions close to midsize and large FUAs (8.4% and 9.8% decrease respectively) than in regions far from these areas (6.1% decrease) (Figure ‎3.8), possibly because agriculture and transport emissions, which have not been reduced significantly, are more significant in regions far from FUAs (OECD, 2021). Nearly 40% of OECD regions and FUAs (167 out of 433 large regions and 475 out of 1 248 FUAs saw an increase in emissions from 2010 to 2022. Alaska in the United States (22% increase, to reach 37 t CO₂-eq per habitant in 2022) and the Northern Territory in Australia (37% increase, to reach 41 t CO₂-eq per habitant in 2022) had the highest per capita emissions in 2010 (Figure ‎3.11 and Figure ‎3.12).

Regional and local governments play an active role in many areas essential for implementing the net zero transition, including land use regulation, housing, energy, transport and environmental protection. In 2019, subnational governments in European Union (EU) and OECD countries accounted for 63% of climate-significant public expenditure and 69% of climate-significant public investment on average (Figure ‎3.9). These shares have increased annually since 2009 by 2.5% for expenditure and 1.4% for investment in real terms. Federal countries (e.g. Belgium and Germany) and unitary countries with high levels of decentralisation (e.g. Italy and Japan) tend to show larger values of subnational climate-significant expenditure and investment. Subnational climate-significant expenditure varies from 24% of general government climate-significant expenditure in Iceland to more than 80% in Japan, and investment ranges from 17% in Iceland to 97% in Australia.

Despite their pivotal role in the net zero transition, as a share of GDP, subnational climate-significant expenditure and investment accounted for only 1.1% and 0.4% of GDP respectively in 2019. The share of subnational climate-significant expenditure ranges from 0.2% in Iceland to 2.2% in Belgium. In turn, the share of investment was the lowest in Iceland (0.01%) and the highest in Japan (0.7%) (Figure ‎3.10). These small shares signal overall low levels of public climate-significant expenditure and investment and reveal significant gaps between public involvement and climate action needs. This calls for more policy action to mobilise funding and financing to subnational governments so they can fulfil their role in accelerating the net zero transition (OECD, 2022).

Emissions refer to production-based emissions, i.e. emissions produced within a region, estimated using the Emissions Database for Global Atmospheric Research (EDGAR), version 8 and expressed in CO₂ equivalents by considering the four main GHGs – carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O) and fluorinated gases (F-gases) with a 100-year global warming potential. These subnational estimates are not sourced from official government sources and may not fully capture the specific regional circumstances of each country. Emissions from shipping, aviation, land use, land use changes and forestry are excluded.

Global warming potential (GWP) is an index that allows comparisons (usually over 100 years) of the impacts of different gases on global warming. Specifically, it is a measure of how much energy the emissions of 1 ton of a gas will absorb over a given period relative to the emissions of 1 ton of CO₂. The larger the GWP, the more a given gas warms the Earth compared to CO₂ over the same period.

Climate-significant expenditure and investment refer to expenditure and investment that could be considered as contributing to climate adaptation or mitigation objectives, defined by functions (e.g. transportation, energy, agriculture) derived from the Classification of the Functions of Government categories from the National Accounts and aligned with the EU taxonomy for sustainable activities.

OECD (2022), “Subnational government climate expenditure and revenue tracking in OECD and EU Countries”, OECD Regional Development Papers, No. 32, OECD Publishing, Paris, https://doi.org/10.1787/1e8016d4-en.

OECD (2021), OECD Regional Outlook 2021: Addressing COVID-19 and Moving to Net Zero Greenhouse Gas Emissions, OECD Publishing, Paris, https://doi.org/10.1787/17017efe-en.