World bank Report: Carbon Pricing Powers $107 Billion boost for public investment
UGO AMADI
World Bank says nearly one-third of global emissions now covered as revenues surge to record levels
Carbon pricing generated a record $107 billion in public revenues in 2025, according to the World Bank’s State and Trends of Carbon Pricing 2026 report.
The figure marks the highest annual total to date, underscoring the growing role of carbon markets in financing climate action and public investment worldwide.
The report shows that nearly 30% of global greenhouse gas emissions are now covered by direct carbon pricing instruments, including carbon taxes and emissions trading systems. A total of 87 carbon pricing policies are in operation across the globe, with new initiatives emerging in middle-income economies such as India and Vietnam.
The Revenue for Climate and Development shows that $107 billion raised in 2025 is being directed into:National energy transition programs, Public budgets to support development priorities, and Climate adaptation projects in vulnerable regions.
Paschal Donohoe, World Bank Managing Director, said carbon pricing “can help countries determine their own energy mix, drive efficiency and innovation, and mobilize resources for development priorities.”
However, Market Trends shows that Carbon prices rose 7% year-on-year, doubling over the past decade, with an average global price of about $21 per ton of CO₂ equivalent.
Carbon credit issuances increased 8% between 2024 and 2025, though prices softened slightly, with premiums for high-quality projects such as forest conservation and reforestation.
Carbon pricing can be an important tool to mobilize finance and secure development outcomes. Today, nearly 30% of global greenhouse gas emissions are covered by a direct carbon price across 87 implemented policies.
The 2026 edition of the State and Trends of Carbon Pricing report provides an opportunity to reflect on the past decade. Viewed over this longer horizon, several trends stand out: carbon pricing has expanded significantly, with more diverse approaches to its design, and steadily increasing carbon prices. Carbon markets have expanded both in size and the potential uses they serve and now exist in a more elaborate ecosystem to generate, trade, and evaluate credits. Drawing on compliance instruments (ETSs and carbon taxes) and carbon crediting data, the report offers evidence-based insights into policies and market developments.
Interestingly, oversupply remains a challenge, with nearly 1 billion tons of unretired credits recorded in 2024. The challenges ahead is while revenues are rising, the report warns of persistent challenges:
Price volatility in carbon credit markets, Equity concerns for poorer nations implementing carbon pricing, and need for stronger demand for high-quality credits to ensure environmental integrity.
Carbon pricing has matured into a cornerstone of global climate finance, mobilizing unprecedented revenues while expanding coverage across economies. With $107 billion raised in 2025 and nearly one-third of emissions priced, the mechanism is proving its potential to fund public investment and accelerate the energy transition.
The World Bank Group’s annual State and Trends of Carbon Pricing report is aimed at providing an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national, and subnational initiatives. It focuses on identifying key developments relating to all forms of direct carbon pricing – emissions trading systems, carbon taxes, and carbon crediting mechanisms. This year’s report will be the thirteenth building on many decades of World Bank Group work in this space.
