Carbon pricing continues to play a vital role in global climate action, with revenues surpassing $100 billion in 2024. The World Bank’s State and Trends of Carbon Pricing 2025 report examines carbon taxes, emissions trading systems (ETS), and crediting mechanisms, showcasing how nations use these instruments to meet climate and development targets.
Now in its twelfth edition, the report provides a comprehensive overview of carbon pricing initiatives worldwide, covering international, national, and subnational efforts. It tracks key developments in ETS, carbon taxes, and crediting mechanisms, building on decades of World Bank expertise.
Key Insights from the 2025 Report
– Coverage: Carbon pricing now applies to 28% of global greenhouse gas emissions, with two-thirds of the world’s GDP under carbon pricing systems.
– Revenue: Over $100 billion was generated in 2024, supporting public budgets.
– Sectoral Impact: More than half of power sector emissions are priced, though coverage varies across industries.
– Carbon Credits: Supply exceeded demand, leaving nearly 1 billion tons of unretired credits in 2024. Compliance markets drove retirements, while prices dipped slightly. Nature-based removal credits and higher-quality offsets maintained modest premiums.
The report highlights how governments use carbon pricing to boost fiscal stability, spur innovation, and attract investment, particularly in developing economies. By analyzing compliance markets and crediting trends, it offers data-driven insights into policy and market progress.
Carbon pricing remains a powerful mechanism for aligning economic growth with climate goals, demonstrating its growing role in global sustainability efforts.
