According to the eleventh annual report “State and Trends of Carbon Pricing” released last week by the Word Bank, the coverage of instruments such as carbon taxes or emissions trading systems is increasing. However, “progress in the past year was slow,” warns the authors.

The number of carbon pricing instruments in operation has now reached 75. Meanwhile, the share of global emissions covered by such instruments has grown from 7% when the first report was released to around 24% last year. Compared to the previous year when the global coverage was 23%, the pace of the implementation slowed down. 

According to the document, the share of global emissions covered by carbon taxes and emissions trading systems could reach 30%, “but this will require strong political commitment,” states the World Bank. 

Besides reduced global coverage, the report also raises concerns about the price level. “The majority of these carbon pricing instruments are not ambitious enough to drive the level of change required to meet the Paris Agreement’s temperature goals”

Furthermore, ten emissions trading systems, including EU ETS and its equivalent in New Zealand, the UK and the Republic of Korea, experienced significant price decreases in 2023. As a result, just seven carbon pricing instruments, covering less than 1% of global emissions, reached a price level required to be on track to limit the temperature rise to well below the 2ºC.