Global and Chinese Carbon Markets Review and Outlook (2026)

Carbon markets, as policy instruments that leverage market mechanisms to achieve low-cost emissions reduction, are being widely applied and are rapidly developing worldwide. Currently, 38 carbon markets are operational globally, with 20 more under development, covering nearly one-third of the global population and 58% of GDP, and regulating approximately 12 billion tonnes of greenhouse gas emissions—accounting for 23% of global total emissions. Since 2007, global carbon markets have generated over USD 373 billion in cumulative revenue, robustly supporting the green and low-carbon transition. 78% of Paris Agreement Parties have explicitly identified carbon markets as a mitigation tool in their latest Nationally Determined Contribution (NDC) targets. By the end of 2025, China's national carbon market had completed compliance obligations for three fulfillment periods, with cumulative allowance trading volume reaching 865 million tonnes and a turnover of RMB 57.633 billion. This report systematically reviews the operational performance and institutional evolution of global and Chinese carbon markets in 2025, and summarizes the latest progress in international carbon markets and cross-border emissions reduction rules. In 2025, international carbon markets developed steadily with an upward carbon price trend. China incorporated its national carbon market into its NDC target system, achieved the first sectoral expansion, significantly enhancing its coverage and policy influence. The issuance of a programmatic document strengthened the institutional top-level design, sending clear and stable development expectations to the market. The release of 14 China Certified Emission Reduction (CCER) methodologies intensively accelerated the development of the voluntary emissions reduction trading market. Notably, against the backdrop of generally rising global carbon prices, China's national carbon market price weakened, and the CCER faced constraints in the verification of emissions reductions and supply in specific sub-sectors. This reflects limited market regulation instruments, a need for clearer institutional construction pathways and objectives, and insufficient integration with global carbon markets. Facing the accelerating evolution of the global climate governance landscape, China's national carbon market urgently needs to enhance market vitality, stabilize construction expectations, strengthen its alignment with global carbon pricing mechanisms and cross-border reduction rules, and continuously improve its functionality.