World Bank: carbon pricing now covers 28 percent of global emissions

The World Bank's State and Trends of Carbon Pricing 2025 reports that emissions trading systems and carbon taxes now cover roughly 28 percent of global greenhouse gas emissions, up from about 5 percent in 2005. The rise of rate-based systems in India and other emerging economies signals a pricing model suited to fast-growing markets pursuing efficiency without absolute caps.

The World Bank's State and Trends of Carbon Pricing 2025 report documents carbon pricing's shift from experimental policy to core economic governance. As of 2025, emissions trading systems and carbon taxes cover roughly 28 percent of global greenhouse gas emissions, a dramatic rise from about 5 percent in 2005. For the second consecutive year, revenues from carbon taxes and ETSs surpassed USD 100 billion, with more than half allocated to environmental protection, infrastructure, and development priorities, reinforcing carbon pricing's dual emissions-reduction and revenue-mobilization utility.

Rapidly growing economies including India, Türkiye, Indonesia, and China are adopting rate-based ETSs that regulate emissions intensity rather than absolute emissions, providing flexibility while catalyzing efficiency improvements. Power and heavy industry sectors have seen significant pricing, yet agriculture, waste, and parts of transport largely remain outside direct frameworks, where carbon-crediting mechanisms serve as complements. China's widening national ETS, now covering additional energy-intensive industrial sectors, exemplifies adaptation to emerging markets and their development priorities.

Policymakers and market participants should monitor the Open Coalition on Compliance Carbon Markets, endorsed by 18 countries and the EU at COP30 in Belém, Brazil, which aims to harmonize pricing policies and explore market interoperability under the Paris Agreement. Members including Brazil, China, the EU, the UK, Canada, and Mexico will influence how national systems integrate with international objectives. Entities should track increasingly sophisticated policy design featuring market stability mechanisms, price floors, and multi-year compliance periods.

Key figure — Carbon pricing coverage: roughly 28 percent of global emissions in 2025, up from 5 percent in 2005