With around 80% of global greenhouse gas emissions directly or indirectly attributed to cities, attempts to mitigate climate change impacts must seriously consider urban carbon transformations. Two challenges are currently constraining urban planning decisions around decarbonisation. Firstly, a lack of detailed knowledge about city-induced emissions occurring outside of the city boundary hampers the design of mitigation strategies that involves the city's ‘hinterland’. Secondly, the complexity of interconnections between industries and regions located upstream or downstream the supply chain of urban economic activity makes it difficult to implement specific, effective and efficient decarbonisation policies. In this study, a multi-scale, multi-region input–output model with nested regions at city, state, nation and world level is employed to study the carbon footprints and the inter-sectoral linkages in terms of embodied carbon emissions of the two largest metropolitan areas of Australia, Melbourne and Sydney. The results show that imported emissions make up more than 50% of the city carbon footprints, with most of them attributable to goods (excluding food) and services (excluding electricity). This highlights the importance of promoting mitigation measures both within and outside of the city. The energy, mining and agriculture sectors – usually located outside of city boundaries – all have significant carbon linkage multipliers associated with city demand, indicating the need of pursuing carbon mitigation measures in these sectors. The linkage analysis pinpoints to crucial sectors that need to be targeted in future investments towards urban decarbonisation to minimise emissions and to maximise positive economic effects for urban and regional economies. The study also provides an improved understanding of the differences and similarities between Australia's two main cities. It is envisaged that this type of analysis will become increasingly relevant to other cities as the spatial resolution of multi-region input–output databases continues to improve.