Carbon pricing can be one of the most powerful tools available to policymakers to incentivize reducing emissions as part of an integrated policy mix. A decade ago, carbon pricing policies covered only 7% of global emissions. Today, nearly a quarter are covered by these instruments.
There is some cause for optimism as carbon pricing and carbon markets continue to evolve and grow, and as new schemes and instruments are introduced that led to revenues reaching a record $104 billion in 2023. Promisingly, most of the revenues raised went towards climate and nature-related programs.
A decade ago, carbon pricing policies covered only 7% of global emissions. Today, nearly a quarter are covered by these instruments.
The total number of implemented instruments also went up: today, there are 75 carbon pricing instruments in operation – with recent efforts in Australia, Hungary, Slovenia, and Mexico.
And these policies are also becoming increasingly adaptable to national contexts and new sectors. Large middle-income countries including Brazil, India, Chile, Colombia, and Türkiye are making notable progress towards implementing emissions trading schemes. While the power and industrial sectors still account for the bulk of carbon pricing coverage, there are also advances in other sectors, including international aviation, shipping, and waste. Countries such as China, Vietnam, Thailand and Singapore are also increasingly seeking complementarity between carbon pricing policies and carbon markets by including carbon crediting frameworks in their policy mixes. This approach can support domestic pricing instruments and help the carbon price signal reach uncovered sectors.
Despite the positive trends that are outlined in this year’s State and Trends of Carbon Pricing report, higher pricing and wider coverage are going to be essential to really unlock the potential of carbon pricing. This will require political commitment, stronger global frameworks, and initiatives to share best practices that can help drive ambition. Time is not on our side as countries will need to move further, faster to decisively bend the emissions curve and safeguard a livable planet.
Despite the positive trends that are outlined in this year’s State and Trends of Carbon Pricing report, higher pricing and wider coverage are going to be essential to really unlock the potential of carbon pricing.
The Annual State and Trends report provides objective and up-to-date information on key developments in carbon pricing, reflecting our efforts to become a world-class Knowledge Bank. It is part of our overall effort to support countries worldwide to understand and develop a full range of carbon pricing policies, including through our Partnership for Market Implementation program.
I hope this year’s report, like its predecessors, will inform, influence and incentivize governments, private sector partners, and civil society stakeholders to support policies that put a price on carbon and help decisively bend the emissions curve.
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The World Bank report highlights record carbon revenues, with policies covering a quarter of global emissions. However, the efforts appear incomplete, as there is no clear disclosure of the emission horizon we face or the global collective actions needed. Even the carbon credits neutralized are just a drop in the ocean compared to the emission targets set. Currently, we face 10 gigatons of emissions... annually, and we are only neutralizing 0.001% of that. While the financial commitment of $100 billion is encouraging, we are falling short environmentally. As a premier organization, the World Bank should provide a comprehensive view of the problems we face and humanity's response. After 12 consecutive COPs, we have failed to meet our targets, leading to cumulative emission burdens for future generations. Neither political nor organizational leaders are adequately reviewing real impacts.The focus is on exploring climate budgets without a reality check on the effectiveness of disbursement
Read more Read lessHow are the carbon credits generated from African forests and land going to contribute to climate mitigation if Africa doesn’t have a control of these credits? Will it not be the case of the developed countries using other countries’ resources to continue polluting and at the same time Africa making little progress to eradicate poverty and achieve sustainable development? Speaking From the climate... justice perspective.
Read more Read lessI'm still optimistic whatever imperfections that comes along the way. Initiative is one factor that is crucial in racing against time.
Worked with Ghana Cocoa Board and did incorporate couple of climate change mitigation and adaptation measures. Due to funding we felt short of achieving our objective. I am up a proposal on tree planting in the cocoa landscape which will require funding and thought some climate funding mechanism like evidence based mechanism can be triggered to support. Thanks
We are pioneers in Nepal to manage waste and animal husbandry litter to produce Biogas and organic fertilizer. We are looking for someone to guide us to sell carbon credits from our biogas plant .
It's a good way to get current trends in the carbon sector. I would like to get to know more.
Hi Jennifer, I am Herath Vidyaratne, now from Sri with well-developed expertise in environmental valuation. I am fully availble for any work in South Asian region. I would be willing to further communicate with you. Bet Regards, Herath