Remarkably little is known about how small and intermediate urban centres tackle their various sustainability challenges, particularly climate and broader environmental change. Accordingly, we address this in the very different contexts of India and South Africa. We conceptualise the small and intermediate towns, and the policy challenges and priorities for mitigating and adapting to the effects of climate/environmental change that can enable transformative adaptations to changing conditions. Central issues are the divisions of powers, responsibilities and the fiscal capacity and independence of local authorities within the respective countries’ multi-level policy and governance frameworks. In India, various functions have been constitutionally devolved to city governments to enable them to govern themselves, while more strategic ones lie at state level. In South Africa, the divisions of power and responsibility vary by city size category. We compare the relevant city government functions in each country and how they can enable/disable policy responses to climate change. The relationship between their sustainable development strategies, plans, budgets, and actions are assessed and illustrated with particular reference to Thiruvananthapuram, Shimla and Bhubaneswar in India and Drakenstein, George and Stellenbosch in South Africa.