Carbon Pricing Covers Two‑Thirds of Global GDP, Accelerates in Emerging Markets

Carbon pricing mechanisms—including taxes and emissions trading systems—now cover economies representing two‑thirds of global GDP, according to the World Bank’s 2025 report. These tools generated over $100 billion in public revenue in 2024 and have seen rapid growth in emerging nations.

As of mid‑2025, 80 carbon pricing instruments are active worldwide, up from just five in 2005 . These schemes span diverse jurisdictions that cumulatively represent approximately 66% of GDP . In 2024, carbon pricing brought in more than $100 billion in revenue, with more than 50% allocated to environmental, infrastructure, and development projects 

Despite this progress, coverage of greenhouse gas emissions remains uneven: only about 28% of global emissions are directly priced, and just 20% align with recommended levels of $40–100 per tonne . Prices vary significantly, from Uruguay’s $160/tCO₂ to below $0.10/t in some cases .

Emerging economies, including India, Brazil, and Turkey, have recently introduced or expanded carbon taxation and emissions trading, joining early adopters in Europe and North America . The World Bank emphasizes that carbon pricing can support fiscal stability, promote green investments, and stimulate low‑carbon innovation 

Conclusion
While recent expansion across jurisdictions and revenue increase signal meaningful progress, the limited coverage of emissions and low pricing levels in many regions indicate persistent gaps. Governments will need to raise price levels and expand coverage to meet climate targets. For emerging economies, scaling carbon pricing offers opportunities to fund green development and shield budgets from fossil‑fuel volatility.

Source :Business Outlook