Key findings of the report

• Carbon Pricing (CP) revenues in 2023 exceeded USD 100 billion for the first time.
• There are 75 global CP instruments in operation, covering around 24% of global greenhouse gas emissions. 
  • Brazil, India, and Türkiye have made notable progress towards CP implementation.
• China and India are largest host countries in terms of issuances of Carbon Credits.

Carbon pricing (CP) is an instrument that attaches a cost to greenhouse gas emissions, typically through CO2 pricing mechanisms.

Main types of CP

• An emissions trading system (ETS): It is a system where emitters can trade emission units to meet their emission targets.
  • Types of ETSs are: Cap-and-trade systems and Baseline-and-credit systems
• Carbon tax: It directly sets a price per unit of greenhouse gas emissions or carbon content.

Benefits of CP

• Place the burden of emissions damage on polluters.
• Spur investment and innovation in clean technology.
• Facilitate Paris Agreement emissions pathways for below 2°C/1.5°C warming.