In 2023, carbon pricing revenues reached a record $104 billion, according to the World Bank’s annual “State and Trends of Carbon Pricing 2024” report released today. The report indicates that there are now 75 carbon pricing instruments in operation worldwide. More than half of the collected revenue was allocated to fund climate and nature-related programs.
Axel van Trotsenburg, World Bank Senior Managing Director, commented on the findings: “Carbon pricing can be one of the most powerful tools to help countries reduce emissions. That’s why it is good to see these instruments expand to new sectors, become more adaptable and complement other measures.” He added that the report could "help expand the knowledge base for policymakers to understand what is working and why both coverage and pricing need to go up for emissions to go down.”
The World Bank has been monitoring carbon markets for approximately two decades, with this being its eleventh annual carbon pricing report. When the first report was published, carbon taxes and Emission Trading Systems (ETS) covered only 7% of global emissions. According to the 2024 report, this figure has risen significantly with 24% of global emissions now covered.
The report highlights that large middle-income countries including Brazil, India, Chile, Colombia, and Türkiye are making considerable progress in implementing carbon pricing. While traditional sectors like power and industry continue to dominate, carbon pricing is increasingly being considered in new sectors such as aviation, shipping and waste. The EU’s Carbon Border Adjustment Mechanism is also encouraging governments to consider carbon pricing for sectors such as iron and steel, aluminum, cement, fertilizers, and electricity.
Additionally, governments are leveraging carbon crediting frameworks more frequently to attract finance through voluntary carbon markets and facilitate participation in international compliance markets.
However, despite record revenues and growth in coverage areas, global carbon price levels remain insufficient to meet the Paris Agreement goals. At present time less than 1% of global greenhouse emissions are covered by a direct carbon price at or above the range recommended by the High-level Commission on Carbon Prices to limit temperature rise to well below 2ºC. The report emphasizes that closing the implementation gap between countries’ climate commitments and policies will necessitate much greater political commitment.
For more information, visit the Carbon Pricing Dashboard website for up-to-date information on existing and emerging carbon pricing initiatives around the world: https://carbonpricingdashboard.worldbank.org/