World Bank Reports Rising Carbon Pricing Revenue

The World Bank has disclosed that global revenue generated from carbon pricing mechanisms exceeded $107bn in 2025, reflecting growing international adoption of emissions trading systems and carbon taxes.

The disclosure was contained in the bank’s “2026 State and Trends of Carbon Pricing” report, which showed that annual revenues from carbon pricing systems increased by two per cent in 2025, extending a decade-long growth trend.

According to the report, carbon pricing revenues have risen from below $30bn in 2016 to above $100bn annually since 2021 as countries intensify efforts to meet climate commitments under the Paris Agreement.

The World Bank stated that the expansion of emissions trading systems continues to reshape global climate financing structures and increase government revenue linked to environmental regulation.

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The report showed that the share of global greenhouse gas emissions covered by emissions trading systems increased from about eight per cent in 2016 to more than 24 per cent in 2025.

However, the bank noted that carbon tax coverage has remained relatively stable at between four and five per cent of global emissions during the same period.

The institution explained that most carbon pricing revenue is still generated in advanced economies where carbon prices are higher and emissions trading frameworks are more established.

It added that several middle-income economies are yet to fully adopt auction-based emissions trading systems despite increasing global momentum toward carbon market expansion.

The World Bank projected that global carbon pricing coverage would continue to rise from 2026 as countries including India, Japan, and Vietnam expand national emissions trading systems.

Japan’s newly established GX-ETS framework is also expected to channel future carbon pricing revenues toward energy transition and decarbonisation projects.

The report highlighted increasing policy efforts among developing countries to position themselves within the global carbon credit market amid growing international demand for climate financing instruments.

In Nigeria, the Federal Government has intensified efforts to establish a functional carbon market as part of its broader climate and energy transition strategy.

President Bola Ahmed Tinubu approved the operationalisation of Nigeria’s national carbon market framework in January 2026 as part of efforts to position the country as a major carbon credit hub in Africa.

The Federal Government projects that Nigeria’s carbon market could generate at least $3bn annually by 2030 through carbon credit trading and climate-related investments.

Earlier in 2025, the government also unveiled plans to mobilise up to $3bn yearly in climate finance through the National Carbon Market Framework and Climate Change Fund.

They added that African countries with developing carbon markets could benefit significantly from rising global demand for carbon credits and climate-linked financing instruments.