World Bank says expanding carbon markets are reshaping global climate financing as Nigeria targets billions from carbon credit trading…..
Global revenues generated from carbon pricing systems climbed above $107 billion in 2025, highlighting the growing role of carbon markets in the global fight against climate change.
This was disclosed in the World Bank’s latest State and Trends of Carbon Pricing 2026 report, which showed that revenues from emissions trading systems and carbon taxes continued their steady upward trajectory last year.
According to the report, global carbon pricing revenues increased by about 2 percent in 2025, extending a decade-long growth trend that has seen annual earnings rise from less than $30 billion in 2016 to consistently exceeding $100 billion since 2021.
The World Bank attributed the growth to the rapid expansion of carbon pricing frameworks as governments intensify efforts to meet emissions reduction targets under the Paris Climate Agreement.
Carbon pricing mechanisms, which include carbon taxes and emissions trading systems (ETS), are increasingly being adopted worldwide as countries seek to reduce greenhouse gas emissions while generating revenue for climate and energy transition projects.
The report noted that emissions trading systems have experienced the strongest growth globally.
According to the World Bank, the share of global greenhouse gas emissions covered by ETS frameworks has expanded significantly from around 8 percent in 2016 to more than 24 percent in 2025.
In contrast, carbon tax coverage has remained relatively stable, accounting for between 4 and 5 percent of global emissions over the same period.
The institution explained that most carbon pricing revenues are still being generated in advanced economies where carbon prices are higher and trading systems are more developed.
However, several emerging economies are beginning to expand their own carbon market structures as climate finance gains greater importance in national economic planning.
The World Bank highlighted Japan’s newly launched GX-ETS framework as one of the major developments expected to channel revenues toward national decarbonisation and energy transition projects.
It also projected that global carbon pricing coverage would expand further from 2026 as countries including India, Japan, and Vietnam continue to strengthen national emissions trading systems.
Nigeria is also positioning itself to benefit from the growing global carbon economy.
The Federal Government has intensified efforts to establish a structured carbon market as part of broader climate and energy transition reforms.
Earlier this year, President Bola Ahmed Tinubu approved the operationalisation of Nigeria’s national carbon market framework, a move expected to strengthen the country’s participation in global carbon credit trading.
Government officials believe the initiative could transform Nigeria into one of Africa’s leading carbon credit hubs over the next decade.
The Federal Government has projected that Nigeria’s carbon market could generate at least $3 billion annually by 2030 through carbon trading activities, climate investments, and clean energy projects.
This follows earlier plans unveiled in November 2025 to mobilise up to $3 billion yearly in climate finance through the National Carbon Market Framework and the Climate Change Fund.
Industry experts say Nigeria is strategically positioned to tap into the expanding carbon market due to its vast natural resources, renewable energy potential, and large forest reserves.
Analysts also point to the country’s growing clean energy sector as a major advantage in attracting climate-related investments.
Carbon markets are increasingly being viewed by developing countries as alternative sources of revenue capable of supporting economic growth while accelerating the transition toward cleaner energy systems.
Experts, however, stress that Nigeria’s long-term success in the sector will depend heavily on strong regulation, transparent carbon credit systems, and credible emissions monitoring mechanisms.
Climate finance advocates also argue that deeper African participation in global carbon markets could help bridge funding gaps needed for climate adaptation, renewable energy expansion, and net-zero development goals across the continent.
