There are three main ways to tax carbon emissions: through a fuel tax (like a gasoline tax), through an explicit tax on carbon emissions, and through an emissions trading system that requires carbon emitters to have marketable permit for doing so. The OECD offers an overview of that is happening across these areas in 79 countries in “Effective Carbon Rates 2025: Recent Trends in Taxes on Energy Use and Carbon Pricing” (November 13, 2025).
Here’s a summary figure: the light-blue bars are the tax imposed on carbon emissions by a fuel tax; the darker blue bars are an explicit carbon tax; and the green bars are the costs imposed by an emissions trading system. The calculations take into account both the level of these taxes, and also the share of carbon emissions actually covered.
One obvious lesson is that fuel taxes remain the primary way in which carbon is taxed. Another lesson is that the countries with the highest carbon taxes tend to be in Europe. If you run your eye down the list looking for the United States, you will find it about three-quarters of the way down, between South Africa and Uruguay. But you will also note that China, by far the world’s largest emitter of carbon, falls even lower on the list. And India, with rapidly rising carbon emissions, is lower than China.
