Carbon pricing revenues globally exceeded the $100 billion mark in 2024, marking a new milestone in international climate finance, according to the World Bank’s State and Trends of Carbon Pricing 2025 report released.
The report highlighted continued momentum in the use of carbon taxes and emissions trading systems (ETSs) to reduce greenhouse gas emissions, raise public revenue, and support sustainable development.
“Carbon pricing remains a powerful tool for advancing multiple policy goals.
“It helps countries cut emissions, raise domestic revenues in tight fiscal environments, and stimulate green growth and job creation.”
Axel van Trotsenburg, World Bank Senior Managing Director
The 2025 edition of the report indicates that more than 80 carbon pricing instruments are now operational worldwide—a net increase of five compared to the previous year. These include both carbon taxes and ETSs.
The majority of new or expanded instruments were emissions trading systems, signaling a global shift toward more market-based mechanisms to regulate carbon emissions.
The rise of carbon pricing policies reflects an increasing awareness of the economic and environmental benefits of emissions reductions.
With more countries adopting or expanding carbon taxes and ETSs, approximately 28% of global greenhouse gas emissions are now covered under carbon pricing programs, accounting for nearly two-thirds of the world’s economic output.
Carbon pricing coverage varies across industries. Power and industrial sectors represent nearly half of global emissions covered under carbon pricing.
Agricultural emissions remain outside most pricing frameworks, with no direct carbon charges applied to farming activities.
Carbon Credit Market: Compliance Rising, Voluntary Stalls
In the carbon credit markets, the compliance segment surged—with demand nearly tripling over the last year. Governments and corporations subject to mandatory emission caps are purchasing more carbon offsets to meet regulatory targets.
However, growth from voluntary buyers, such as businesses pursuing net-zero goals, has been modest, reflecting ongoing concerns over the credibility and verification of some projects.
“Credible carbon markets are essential to mobilizing private capital for climate action.
“Better governance, transparency, and standardization are needed to restore trust and ensure high-quality credits.”
World Bank’s State and Trends of Carbon Pricing 2025 Report
Notably, nature-based carbon removal credits—projects involving forest conservation, afforestation, or soil carbon sequestration—continued to attract a pricing premium, as buyers increasingly seek credits with broader environmental and social co-benefits.
The World Bank’s data shows that while annual changes in carbon pricing have often been incremental, long-term trends point to robust growth and deepening integration into fiscal and climate frameworks.
Since 2014, average carbon prices have nearly doubled, global emissions coverage increased from 12% to 28%, and annual revenues from carbon pricing tripled.
This steady progression underscores the policy’s resilience and adaptability, even in the face of economic uncertainties and geopolitical challenges.
“We need to ensure that carbon pricing policies are inclusive, transparent, and just.
“This is essential not just for environmental sustainability but also for social equity and long-term economic resilience.”
Axel van Trotsenburg, World Bank Senior Managing Director
The crossing of the $100 billion revenue mark highlights the growing impact of carbon pricing on global financial and environmental landscapes.
While gaps in implementation persist, the steady expansion of carbon markets signals increasing global commitment to reducing emissions and funding climate resilience.
As climate targets tighten and the need for resilient green financing grows, carbon pricing is expected to play an even greater role in the coming years.
However, the report cautions that further expansion and harmonization are needed, particularly in sectors currently exempt from carbon pricing and in ensuring that developing countries benefit fairly from carbon markets.
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