KEY POINTS
- Carbon pricing generated a record $107 billion in public revenues globally in 2025, the World Bank confirms.
- Nearly 30 percent of global greenhouse gas emissions are now covered by direct carbon pricing instruments.
- Carbon prices rose 7 percent year-on-year in 2025, doubling over the past decade to an average of $21 per ton.
Carbon pricing has never raised more money in a single year. The World Bank’s State and Trends of Carbon Pricing 2026 report confirms that carbon taxes and emissions trading systems generated a record $107 billion in public revenues in 2025, the highest annual total ever recorded and a signal that carbon markets are maturing into a serious source of climate and development finance.
The figure comes as coverage expands. Nearly 30 percent of global greenhouse gas emissions are now subject to a direct carbon price. Across 87 active carbon pricing policies worldwide, new initiatives are emerging in middle-income economies including India and Vietnam, broadening the geographic footprint of a mechanism that was once largely confined to Europe and a handful of developed markets.
World Bank Managing Director Paschal Donohoe said the instrument has moved well beyond a theoretical climate tool. “Carbon pricing can help countries determine their own energy mix, drive efficiency and innovation, and mobilize resources for development priorities,” he said.
Where the $107 billion is going
The revenues raised in 2025 are flowing into national energy transition programs, public budgets supporting broader development priorities and climate adaptation projects in vulnerable regions. The World Bank frames this as carbon pricing delivering a dual mandate: reducing emissions while financing the public investment that lower-income countries need to adapt and grow.
Carbon credit issuances rose 8 percent between 2024 and 2025, with premiums holding for high-quality projects in forest conservation and reforestation. Carbon prices climbed 7 percent year-on-year and have now doubled over the past decade, settling at an average of approximately $21 per ton of carbon dioxide equivalent.
The challenges underneath the records
The World Bank is not declaring victory. Oversupply remains a structural problem, with nearly one billion tons of unretired credits recorded in 2024. Price volatility in carbon credit markets, equity concerns for poorer nations implementing carbon pricing and weak demand for high-quality credits are all flagged as persistent challenges that the record revenues do not resolve on their own.
The report is the 13th annual edition from the World Bank Group and draws on data from emissions trading systems, carbon taxes and carbon crediting mechanisms across international, national and subnational levels. Its central argument is that carbon pricing has earned its place as a cornerstone of global climate finance but still requires stronger policy commitment and market integrity to fulfill its potential.
