Cities are expected to become much warmer in the future due to a combination of climate change and the urban heat island effect. The urban heat island occurs when natural surfaces, such as vegetation and water, are replaced by heat-trapping concrete and asphalt, and exacerbated by heat from cars, air-conditioners etc. This effect is expected to add a further two degrees to global warming estimates for the most populated cities by 2050.

Overheated cities face climate change costs at least twice as high as the rest of the world because of this urban heat island effect, new research shows. Higher temperatures damage the economy in a number of ways - more energy is used for cooling, air is more polluted, water quality decreases and workers are less productive, to name a few.

The article in Nature Climate Change by myself and co-authors Francisco Estrada and Richard Tol has estimated the economic impacts of future heat stress in 1,692 major cities worldwide and assessed city-level adaptation strategies to limit local warming. For the worst-off city, losses could reach 10.9 per cent of the income earned in these cities by the end of the century, compared with a global average of 5.6 per cent.

We carried out a cost-benefit analysis of different local policies for combating the urban heat island, such as cool pavements - designed to reflect more sunlight and absorb less heat - cool and green roofs, and expanding vegetation in cities. Policies that expand vegetation in cities, like green roofs and parks, can contribute to reducing urban heat and have important side benefits, like for recreation and amenity values.

A policy that combines these grey and nature-based solutions for heat reduction prevents on average €4 of heat impacts per invested euro in a situation when no strong international action to prevent climate change is taken. These city-level policies remain economically attractive even when the world would agree on reducing greenhouse gas emissions to limit climate change.

This study has applied an aggregated global approach to assess economic benefits of green in cities. Next steps of the economic analyses in the NATURVATION project are to provide more detailed local estimates of the economic benefits of nature-based solutions, like green roofs, which are needed to guide the local implementation of such measures.

Wouter Botzen is Professor of Economics of Global Environmental Change at the Utrecht University School of Economics and working on the NATURVATION project.