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Ranking the Top 15 Countries by Carbon Tax Revenue

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A chart showing the top 15 countries by carbon tax revenue.

Top 15 Countries by Carbon Tax Revenue

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Carbon taxes are designed to discourage CO2 emissions by increasing the cost of carbon-intensive activities and incentivizing the adoption of cleaner energy alternatives.

In this graphic we list the top 15 countries by carbon tax revenue as of 2022. The data is from the World Bank’s State and Trends of Carbon Pricing Report, published in April 2023.

France and Canada Lead in Global Carbon Tax Revenue

In 2022, the top 15 countries generated approximately $30 billion in revenue from carbon taxes.

France and Canada lead in this regard, accounting for over half of the total amount. Both countries have implemented comprehensive carbon pricing systems that cover a wide range of sectors, including transportation and industry, and they have set relatively high carbon tax rates.

CountryGovernment revenue
in 2022 ($ billions)
🇫🇷 France$8.9
🇨🇦 Canada$7.8
🇸🇪 Sweden$2.3
🇳🇴 Norway$2.1
🇯🇵 Japan$1.8
🇫🇮 Finland$1.7
🇨🇭 Switzerland$1.6
🇬🇧 United Kingdom$0.9
🇮🇪 Ireland$0.7
🇩🇰 Denmark$0.5
🇵🇹 Portugal$0.5
🇦🇷 Argentina$0.3
🇲🇽 Mexico$0.2
🇸🇬 Singapore$0.1
🇿🇦 South Africa$0.1

In Canada, the total carbon tax revenue includes both national and provincial taxes.

While carbon pricing has been recognized internationally as one of the more efficient mechanisms for reducing CO2 emissions, research is divided over what the global average carbon price should be to achieve the goals of the Paris Climate Agreement, which aims to limit global warming to 1.5–2°C by 2100 relative to pre-industrial levels.

A recent study has shown that carbon pricing must be supported by other policy measures and innovations. According to a report from Queen’s University, there is no feasible carbon pricing scenario that is high enough to limit emissions sufficiently to achieve anything below 2.4°C warming on its own.

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Environment

The Most Polluted Cities in the U.S.

What are the most polluted cities in the U.S. according to data from the American Lung Association’s 2024 State of the Air Report?

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Teaser image for an infographic showing the most polluted cities in the U.S. according to the American Lung Association's 2024 State of the Air report.

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The following content is sponsored by National Public Utilities Council

The Most Polluted U.S. Cities in 2024

According to the World Health Organization, air pollution is responsible for 7 million deaths annually, and could cost the global economy between $18–25 trillion by 2060 in annual welfare costs, or roughly 4–6% of world GDP.

And with predictions that 7 in 10 people will make their homes in urban centers by mid-century, cities are fast becoming one of the frontlines in the global effort to clear the air.

In this visualization, we use 2024 data from the State of the Air report from the American Lung Association to show the most polluted cities in the United States.

What is Air Pollution?

Air pollution is a complex mixture of gases, particles, and liquid droplets and can have a variety of sources, including wildfires and cookstoves in rural areas, and road dust and diesel exhaust in cities. 

There are a few kinds of air pollution that are especially bad for human health, including ozone and carbon monoxide, but here we’re concerned with fine particulate matter that is smaller than 2.5 microns, or PM2.5 for short. 

The reason for the focus is because at that small size, particulate matter can penetrate the bloodstream and cause all manner of havoc, including cardiovascular disease, lung cancer, and chronic pulmonary disease. 

The American Lung Association has set an annual average guideline of 9 µg/m³ for PM2.5, however, the World Health Organization has set a much more stringent limit of 5 µg/m³.

The 21 Worst Polluted Cities in the U.S.

Here are the top 21 most polluted cities in the U.S., according to their annual average PM2.5 concentrations:

RankCity, StateAnnual average concentration, 2020-2022 (µg/m3)
1Bakersfield, CA18.8
2Visalia, CA18.4
3Fresno, CA17.5
4Eugene, OR14.7
5Bay Area, CA14.3
6Los Angeles, CA14.0
7Sacramento, CA13.8
8Medford, OR13.5
9Phoenix, AZ12.4
10Fairbanks, AK12.2
11Indianapolis, IN11.9
12Yakima, WA11.8
13Detroit, MI11.7
T14Chico, CA11.6
T14Spokane, WA11.6
15Houston, TX11.4
16El Centro, CA11.1
17Reno, NV11.0
18Pittsburgh, PA10.9
T19Kansas City, KS10.8
T19Las Vegas, NV10.8

Note: The American Lung Association uses Core Based Statistical Areas in its city and county rankings, which have been shortened here to the area’s principal city, or metro area in the case of the Bay Area, CA.

Six of the top seven cities are in California, and four in the state’s Central Valley, a 450-mile flat valley that runs parallel to the Pacific coast, and bordered by the Coast and Sierra Nevada mountain ranges. As a result, when pollution from the big population centers on the coast is carried inland by the wind—cities #5 and #6 on the list—it tends to get trapped in the valley. 

Bakersfield (#1), Visalia (#2), and Fresno (#3) are located at the drier and hotter southern end of the valley, which is worse for air quality. The top three local sources of PM2.5 emissions in 2023 were farms (20%), forest management / agricultural waste burning (20%), and road dust (14%). 

Benefit to Economy

While the health impacts are generally well understood, less well known are the economic impacts.

Low air quality negatively affects worker productivity, increases absenteeism, and adds both direct and indirect health care costs. But the flip side of that equation is that improving air quality has measurable impacts to the wider economy. The EPA published a study that calculated the economic benefits of each metric ton of particulate matter that didn’t end up in the atmosphere, broken down by sector. 

SectorBenefits per metric ton
Residential Woodstoves$429,220
Refineries$333,938
Industrial Boilers$174,229
Oil and Natural Gas Transmission$125,227
Electricity Generating Units$124,319
Oil and Natural Gas$88,838

At the same time, the EPA recently updated a cost-benefit analysis of the Clean Air Act, the main piece of federal legislation governing air quality, and found that between 1990 and 2020 it cost the economy roughly $65 billion, but also provided $2 trillion in benefits

Benefit to Business

But that’s at the macroeconomic level, so what about for individual businesses?

For one, employees like to breathe clean air and will choose to work somewhere else, given a choice. A 2022 Deloitte case study revealed that nearly 70% of highly-skilled workers said air quality was a significant factor in choosing which city to live and work in.

At the same time, air quality can impact employer-sponsored health care premiums, by reducing the overall health of the risk pool. And since insurance premiums averaged $7,590 per year in 2022 for a single employee, and rose to $21,931 for a family, that can add up fast. 

Consumers are also putting their purchase decisions through a green lens, while ESG, triple-bottom-line, and impact investing are putting the environment front and center for many investors.

And if the carrot isn’t enough for some businesses, there is the stick. The EPA recently gave vehicle engine manufacturer Cummins nearly two billion reasons to help improve air quality, in a settlement the agency is calling “the largest civil penalty in the history of the Clean Air Act and the second largest environmental penalty ever.”

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