Domestic Carbon Markets
Domestic carbon markets, which exist separate from international exchanges, can support NDCs and country-level platforms.
2030 Goals
- Development and implementation of domestic carbon markets that capitalize on the actions of domestic private sector and support meeting NDCs targets using light-touch compliance approaches.
- Globally accepted integrity standards for carbon credits created and traded.
- Markets developed in coordination with national / regional climate strategies, including country-level platforms.
StatusModerate progress
Moderate progress
- A few countries have explored ways to build out domestic carbon markets, with varying success. It has re-entered the conversation as a key focus, with significant country interest in both developed economies and EMDEs.
- According to the World Bank, there are 74 carbon taxes and emissions trading systems implemented under national and subnational jurisdictions as of 2024.
- The World Bank also reported that there are 34 government-administered carbon crediting mechanisms under national and subnational jurisdictions as of 2024. Some governments see expansion of domestic carbon credits as a springboard for participating in international carbon markets, while others focus on domestic use, such as for companies to offset domestic compliance requirements.
Relevant Actors & Audiences
Private FIs
CME Group, Intercontinental Exchange, Inc
Public FIs
China Clean Development Mechanism Fund (Participating), Development Bank of Nigeria, Development Bank of Southern Africa, Brazilian Development Bank (BNDES)
Governments
California Air Resources Board, EU Emissions Trading System, Egypt, Nigeria, Brazil, South Africa
Supportive Stakeholders
G20 Ministries of Finance, Institute for Climate and Society, CONCITO, Environmental Defense Fund (cap and trade), International Emissions Trading Association, Gold Standard, Verra
Multilateral Development Banks
World Bank
Some of the MDBs have programs to bolster the development of domestic markets, including the World Bank Partnership for Market Implementation. The South African PCC also has ongoing discussions on domestic markets.
Milestones
The below events contain milestones related to Domestic Carbon Markets.
June
I4C conference
Milestones
Domestic Carbon Markets
- Advance innovative climate solutions in carbon pricing and carbon markets through a series of high-level and technical plenaries featuring public and private sector leaders.
- Launch of the 2025 State and Trends of Carbon Pricing Report
November
UNFCCC COP30
Milestones
Domestic Carbon Markets
Establish clearer rules on when and how domestic credits can be used in international compliance markets.
Resources
The below resources all pertain to the topic of Domestic Carbon Markets.
Carbon Market Regulations Tracker
Carbon Markets, Domestic Carbon Markets
The Carbon Market Regulations Tracker is developed to enhance the understanding and transparency of carbon market regulations, and support governments, project developers, investors, and other market participants in navigating the evolving regulatory landscape.
State and Trends of Carbon Pricing Dashboard
Carbon Markets, Domestic Carbon Markets
The World Bank's Carbon Pricing Dashboard provides details about direct carbon pricing instruments and carbon markets around the world.
State and Trends of Carbon Pricing Report
Carbon Markets, Domestic Carbon Markets
This report focuses on the direct pricing of greenhouse gas emissions through carbon taxes, emissions trading systems, and carbon crediting mechanisms.
High Integrity, High Impact: The World Bank Engagement Roadmap for Carbon Markets
Carbon Markets, Domestic Carbon Markets
High-integrity carbon markets can be a win-win for people and the planet, potentially generating millions, if not billions, for countries on the pathway to low carbon development. While there are challenges, the potential of carbon markets needs to be tapped and fully utilized.