State and Trends of Carbon Pricing 2025 ( UPSC Prelims)

News Context

Released by: World Bank Group. Carbon pricing is an environmental policy tool that assigns a financial cost to greenhouse gas (GHG) emissions, typically measured in per ton of CO₂ equivalent (tCO₂e). Sector Wise Coverage: The power sector, followed by the industry sector, has the highest coverage.
 Carbon Pricing and its Instruments:
  ● Emissions Trading Systems: The government establishes a cap on GHG emissions or emission intensity for covered entities.  
  ● Carbon Taxes: The government imposes a fee on covered entities for their GHG emissions.  
  ● Carbon Crediting Mechanisms: Tradable credits are created through voluntary activities that reduce emissions.