As of mid-2025, the global landscape of carbon pricing has expanded significantly, with 80 operational instruments, including 43 carbon taxes and 37 emissions trading systems (ETSs), up from just 10 instruments two decades ago.

These carbon pricing mechanisms now cover nearly one-third of global greenhouse gas emissions, generating over $100 billion in revenue, with the EU ETS being the largest contributor at 41%.

Carbon pricing coverage is most pronounced in the power sector, while agriculture and transport remain largely unregulated, indicating an uneven growth trajectory.

The World Bank emphasizes that carbon pricing not only aims to reduce emissions but also serves as a vital revenue source for governments, especially those facing fiscal challenges.

Despite the growth in carbon pricing, many emissions remain unpriced or underpriced, with current prices often falling below the recommended $40–$80 per ton needed to meet Paris Agreement targets.

Private finance is increasingly flowing into carbon credit markets, with nature-based projects attracting the largest share of the estimated $14 billion raised in the first three quarters of 2024.

A notable trend in 2024 is the introduction of new carbon pricing programs, predominantly in the form of ETSs, signaling a shift towards market-driven approaches for emissions regulation.

China has expanded its ETS to include heavy industries such as cement and steel, which now account for 15% of global emissions, showcasing the country's commitment to carbon pricing.

The carbon pricing framework is categorized into three main types: emissions trading systems, carbon taxes, and carbon credit trading mechanisms, each playing a unique role in emissions reduction.

Countries representing nearly two-thirds of global GDP are increasingly adopting carbon pricing tools, with significant developments in nations like Chile, South Africa, and India.

Credit trading mechanisms allow companies to trade credits for emissions reduction activities, enabling them to offset their emissions through purchased credits.

If global emissions were priced at $50 per ton, the potential annual revenue could reach approximately $2.6 trillion, highlighting the substantial revenue potential of effective carbon pricing.