Developments in Carbon Pricing Systems

Carbon pricing systems are evolving rapidly and having a profound impact on global economies. There are three types of carbon pricing systems: greenhouse gas (GHG) emissions trading systems (ETS), carbon taxes, and carbon credit mechanisms. After reviewing the current status of NDCs (Nationally Determined Contributions) and the GHG emissions that still need to be avoided by 2035, this article summarizes the main changes observed in recent years (2024–2025) regarding these three carbon pricing systems.

The global reduction in greenhouse gas emissions stems primarily from the adoption of public policies and the implementation of economic and financial instruments, such as carbon pricing mechanisms. An analysis of these mechanisms helps us understand their impact on economic competitiveness and, ultimately, highlights the need to set highly ambitious NDC targets to achieve climate goals (not exceeding 36 gigatons of CO ₂ equivalent (GtCO ₂ e) in 2035 to stay below 2°C).