A price on carbon remains a widely used financial tool for governments to curb greenhouse gas emissions.

The net effective carbon price is the average cost emitters face for releasing carbon dioxide, after accounting for both explicit carbon costs and subsidies that lower fossil fuel prices. In other words, it’s the real-world carbon price once you balance taxes, trading schemes, and government support.

Significant, but stalled: In the OECD’s Pricing Greenhouse Gas Emissions 2024 report, of the 79 countries covered, 42% of emissions are subject to a net effective carbon price. The share is much higher in OECD nations.

Although the share of emissions covered has barely changed since 2021, many countries have reduced the overall carbon cost on households, citing energy affordability and security concerns that spiked after the 2022 energy crisis.

+Read the full report: Pricing Greenhouse Gas Emissions 2024