Stockholm is a leading city for green economic growth. Despite the global downturn, the city’s low carbon economy remains highly competitive and well positioned for driving sustained growth in the medium to long term. This report, produced in partnership with the City of Stockholm, shows that Stockholm took early action to build a green economy – unlike most cities, environmental policies have been important to Stockholm for over 40 years. At the same time, early infrastructure investment such as building the city’s metro system in the 1950s, and development of district heating following the 1970s oil shocks has helped to build today’s lower carbon economy. Featuring a wealth of new research findings, the report shows how Stockholm benefits from a low-carbon energy system, a relatively compact centre with good public transport and an innovation-led economy for developing smart city solutions and export markets of the future. The report also examines the challenges that Stockholm faces in maintaining its position as a green economy leader internationally. The city’s ambitious goal to become fossil fuel free by 2050 will require strong policy action in the heating and transport sectors to avoid the long-term lock-in of high carbon infrastructure, systems and technology. The benefits of developing a dedicated clean-tech business cluster, alongside the smart innovation districts at Hammarby and Royal Seaport, are also examined.