2025 Update – The Role of Carbon Pricing in Combating Climate Change

New insights following the World Bank's annual report

This post is issued by Osmosis (Holdings) Limited, a London based investment management group. For more information, please contact Lisa Harrison on 07716 912832 or [email protected]

June 23, 2025

By Lily Andrews, Environmental Analyst

Although progress with carbon pricing has been swift in recent years, the actual prices of carbon are still insufficient if we are to achieve the Paris Agreement goals.

Executive Summary

Carbon pricing, primarily in the form of a carbon tax or an Emissions Trading System (ETS) is utilised as a cost-effective way of encouraging green innovation, emissions reductions, and the global transition to a low-carbon economy

As of 2025, there are 113 active carbon pricing instruments globally, comprising 43 carbon taxes, 37 ETS. The remaining 33 are governmental carbon crediting mechanisms.

These instruments cover 28% of global GHG emissions, a substantial rise from 24% in 2023

Countries with carbon pricing mechanisms in place now represent nearly two-thirds of global GDP.

Although progress with carbon pricing has been swift in recent years, the actual prices of carbon are still insufficient if we are to achieve the Paris Agreement goals

2025 Update – the Role of Carbon Pricing in Combating Climate Change Download

Important Information

Global Investors (ex US). This report is issued in the UK by Osmosis Investment Management UK Limited (“Osmosis”). Osmosis is authorised and regulated by the Financial Conduct Authority “FCA” with FRN 765056. This document is a “financial promotion” within the scope of the rules of the FCA. In the United Kingdom, the issue or distribution of this document is being made only to and directed only at professional clients (as defined in the rules of the FCA) (“Professional Clients”). This document must not be acted or relied upon by persons who are not Professional Clients. Any investment or investment activity to which this document relates is available only to Professional Clients and will be engaged in only with Professional Clients.

This document is issued by Osmosis Investment Management US LLC (“Osmosis”). Osmosis Investment Management UK Limited (“Osmosis UK”) is an affiliate of Osmosis and has been operating the Osmosis Model of Resource Efficiency. Osmosis UK is regulated by the FCA. Osmosis and Osmosis UK are both wholly owned by Osmosis (Holdings) Limited (“OHL”).

IMPORTANT INFORMATION:

Global Investors (ex US and Australia). This document is issued in the UK by Osmosis Investment Management UK Limited (“Osmosis”). Osmosis is authorised and regulated by the Financial Conduct Authority “FCA” with FRN 765056. This document is a “financial promotion” within the scope of the rules of the FCA. In the United Kingdom, the issue or distribution of this document is being made only to and directed only at professional clients (as defined in the rules of the FCA) (“Professional Clients”). This document must not be acted or relied upon by persons who are not Professional Clients. Any investment or investment activity to which this document relates is available only to Professional Clients and will be engaged in only with Professional Clients.

US Investors. This document is issued by Osmosis Investment Management US LLC (“Osmosis”). Osmosis Investment Management UK Limited (“Osmosis UK”) is an affiliate of Osmosis and has been operating the Osmosis Model of Resource Efficiency. Osmosis UK is regulated by the FCA. Osmosis and Osmosis UK are both wholly owned by Osmosis (Holdings) Limited (“OHL”).

Australia Investors: This document is issued in Australia by Osmosis Investment Management (Australia) Pty Ltd (ABN 80 670 854 798, CAR No. 001305635) is a corporate authorised representative of Eminence Global Asset Management Pty Ltd which is the holder of an Australian Financial Services Licence (AFS Licence No. 305573). Osmosis Investment Management (Australia) Pty Ltd) is a member of the Osmosis group of companies, the parent company being Osmosis (Holdings) Limited a UK company headquartered in London.

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