Global carbon pricing revenues exceed $100bn in 2024 for public budgets

A new report from the World Bank has revealed that carbon pricing revenues surpassed $100bn in 2024, marking a substantial contribution to public budgets.

More than 50% of these funds were allocated to environmental initiatives, infrastructure, and development projects, indicating a continued commitment to sustainable growth.

The ‘State and Trends of Carbon Pricing 2025’ report highlights that the number of carbon pricing instruments globally has reached 80, with a net increase of five in the past year.

This expansion signifies that all large middle-income economies are now either utilising or considering the adoption of direct carbon pricing mechanisms.

Emissions trading systems (ETSs) are the predominant choice for new and planned instruments.

As more nations adopt or enhance carbon taxes and ETSs, around 28% of global greenhouse gas emissions are now subject to carbon pricing in economies that represent nearly two-thirds of the world’s economic output.

This includes approximately half of the emissions from the power and industrial sectors. However, coverage in other sectors, including agriculture, remains low, with emissions yet to be priced.

World Bank senior managing director Axel van Trotsenburg said: “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. Carbon credit markets can also help mobilise private capital and channel funds to development priorities.”

In the realm of carbon crediting markets, the report notes a significant increase in demand from compliance markets, which has almost tripled compared to the previous year.

In contrast, growth from voluntary buyers has been minimal. Prices for carbon credits vary based on credit types, with nature-based removal credits commanding higher prices than other project types.

The World Bank has been publishing the ‘State and Trends’ report since 2003.

Over the past decade, the landscape of carbon pricing has undergone considerable changes. Average prices have nearly doubled, the coverage of emissions has expanded from 12% to 28%, and revenue has seen a threefold increase.