Carbon Pricing Revenues at $107 Billion in 2025: World Bank
Jurisdictions comprising almost two-thirds of global GDP have a direct carbon price in place and the largest middle-income economies, including Brazil, China, India, Indonesia, and Türkiye have implemented or are moving toward implementing carbon pricing.
Chennai: Carbon pricing covers 30 per cent of emissions and its revenues have tripled over the past decade to more than $107 billion for public budgets in 2025. India is progressing on a rate-based Emissions Trading System, finds the World Bank.
Carbon pricing revenues have tripled over the past decade—rising from below $30 billion in 2016 to mobilizing more than $107 billion for public budgets in 2025.
Direct carbon prices have grown 7 per cent since last year’s edition and have doubled over the last decade. The average carbon price is now nearly $21/tCO2e.
Carbon credit prices declined slightly across 2025, but certain types of projects continued to have a price premium, including those eligible for use by international airlines, or highly rated forest conservation and reforestation projects.
All large middle-income economies have now either implemented or are planning direct carbon pricing instruments, with the most significant developments in the past year in India and Vietnam.
Brazil, India, and Türkiye have met key milestones to facilitate Emissions Trading System implementation, while Colombia and Indonesia expanded coverage.
Most new and planned instruments are ETSs. While designs vary, many governments including India have selected a rate-based approach.
Under this approach, a country sets an emissions intensity benchmark per unit of production rather than an absolute cap on total pollution. Emitters that perform better than the benchmark earn tradable credits, while those who underperform must purchase credits. It does not penalize an industry for expanding production. Since emissions limits are relative to output.
Jurisdictions comprising almost two-thirds of global GDP have a direct carbon price in place and the largest middle-income economies, including Brazil, China, India, Indonesia, and Türkiye have implemented or are moving toward implementing carbon pricing.
In July 2024 the Indian government adopted detailed regulations for its planned Carbon Credit Trading Scheme, a rate-based ETS covering an initial nine energy-intensive industrial sectors. The programme will issue carbon credit certificates to covered facilities that outperform an emissions intensity benchmark.
A domestic voluntary carbon crediting programme is also being developed, which would issue carbon credits for activities and emissions sources not covered by the ETS. On March 28, 2025, India’s Ministry of Power announced the approval of eight crediting methodologies, including for renewable energy, green hydrogen production, industrial energy efficiency, and mangrove afforestation and reforestation.
