- The World Bank’s State and Trends in Carbon Pricing 2023 report provides an overview of existing and emerging carbon pricing instruments, including carbon taxes, carbon credit mechanisms, and ETS emissions trading systems.
- The report emphasizes the need for continued growth in carbon pricing to drive global climate action and meet the goals of the Paris Agreement.
- Despite the global energy crisis and economic problems, revenues from carbon credits and taxes reached a record high in 2022.
- Carbon pricing is seen as essential to decarbonize world economies by providing economic incentives for climate-friendly changes.
- While carbon prices slowed down in 2022, they are still growing, with most instruments in high-income countries having prices above USD 50 and nearly all above USD 15.
- In middle-income countries, most instruments have prices below USD 10, with some exceptions.
- Several countries plan to strengthen their ETS and carbon taxes in the coming years. Energy markets and drought were some of the main factors affecting carbon prices, and most carbon taxes cover fossil fuels while ETS tend to focus on large industrial facilities.
- The small increase in carbon instruments in operation covers approximately 23% of global carbon emissions, with emerging economies showing increasing interest in adopting carbon credit instruments.
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