World Bank Carbon Pricing 2025: Trends and Challenges

13 June 20251 min read

The World Bank’s 2025 report on carbon pricing came as these schemes covered close to 28% of global emissions.

Key facts

Instruments: 5 in 2005 to 80 in 2025 (43 carbon taxes, 37 ETSs).
Revenue: over $100 billion in 2024.
New entrants: India, Brazil and Türkiye are building national frameworks.
Nature-based credits raised $14 billion in Q1-Q3 2024, mostly afforestation and land restoration.
Power has the highest coverage; industry and aviation moderate; agriculture and waste largely outside.

A market tool putting a cost on GHG emissions to push cuts.
Carbon tax: fixed charge per tonne of CO₂.
ETS: cap-and-trade, where emitters trade allowances under a limit.
Carbon credits: tradable certificates from verified reduction or removal projects such as reforestation and methane capture.

Uneven sector coverage and unstable voluntary markets.
Slow delivery of tech-based removals such as Direct Air Capture and Enhanced Rock Weathering.
Weak MRV systems in low-income countries; higher energy costs can burden poor households.

Bring in agriculture and waste; use blockchain and satellite MRV.
Harmonise standards across Verra and Gold Standard; scale removals with public-private funds.
Channel carbon revenue to clean energy, health care and social protection.

Test yourself

1. In the World Bank's 2025 carbon pricing report, how many carbon pricing instruments exist?

The report counts 80 instruments: 43 carbon taxes and 37 ETSs.

2. What type of ETS model does India's proposed 2024 scheme follow, per the report?

India's ETS is benchmark-based intensity, not a strict emissions cap.

3. Which sectors are mostly absent from carbon pricing schemes, according to the report?

Agriculture and waste are largely excluded.