The smart city paradigm, a focus of local governments for over a decade, aims at harmonizing urban growth with sustainability and enhancing citizens' quality of life. This paradigm, evolving since the early 2000s, has shifted from a technology-centric to a more citizen-centric approach, emphasizing sustainable and eco-friendly practices and inclusive governance. With ongoing urbanization, cities face increasing demands for resources, necessitating new governance models. The smart city concept has evolved to address these challenges, initially emphasizing technology's role in optimizing urban systems, later shifting towards citizen engagement and sustainability. However, climate change, exacerbated by urbanization since the Industrial Revolution, poses new challenges to this paradigm. Cities are now pivotal in promoting decarbonization and energy transition. This special issue, originating from the 2022 Bozen conference, explores smart cities in a climate-neutral scenario, focusing on urban sustainability. It includes seven contributions discussing smart city challenges and adaptations for policymakers in decarbonization and environmental sustainability. The issue examines various aspects, from technology and governance to social justice and energy transition, and emphasizes the importance of interdisciplinary approaches in creating sustainable urban environments. It concludes with insights on the complexity of smart cities, the role of local governance, data ownership, and climate management, highlighting the need for interdisciplinary research and innovation in developing resilient cities.