Carbon pricing raises over KSh 13.8 trillion in government revenue

WASHINGTON, DC, USA—Carbon markets and pricing have raised government revenues across the world in the past decade to more than KSh 13 trillion.

Data from the World Bank Group Report, dubbed State and Trends of Carbon Pricing 2026, shows that carbon pricing revenues more than tripled from $30 billion (KSH 3.8 trillion) in 2016 to $107 billion (KSh 13.8 trillion) for public budgets in 2025.

Carbon Markets Regulations in Kenya

The annual report seen by News Nine showed that there are now 87 carbon pricing policies globally, including Kenya’s Carbon Markets Regulation 2024.

The Kenya Climate Change (Carbon Markets) Regulations, 2024, seek to provide the legal framework for the operation of carbon projects and markets across the country.

According to the World Bank Report, all large middle-income economies have now either implemented or are planning direct carbon pricing instruments.  

The report also showed that direct carbon prices have grown 7% since last year’s edition and have doubled over the last decade. The average carbon price is now nearly $21/tCO2e.

How carbon markets and pricing help countries in revenue mobilisation

It emerged that over 29% of global greenhouse gas emissions worldwide are now covered by direct carbon pricing, a figure expected to increase to around one-third if carbon markets and pricing policies are fully implemented globally.

World Bank Group Managing Director and Chief Knowledge Officer Paschal Donohoe said Carbon pricing and carbon markets can play an important role in allowing countries to determine their own energy mix

“When designed well, they can help to drive efficiency and innovation, while mobilising resources for development priorities. For more than 20 years, this report has helped policymakers and the private sector better understand the evolution of these markets and the opportunity they present,” said Donohoe.

The report further indicated that carbon credit issuances rose 8% from 2024 to 2025. However, carbon credit prices declined slightly across 2025.

Meanwhile, certain types of carbon market projects continued to have a price premium, including highly rated forest conservation and reforestation projects, such as tree planting.