The number of carbon pricing schemes has nearly doubled globally since 2012, but prices are too low to help avert global warming, says the World Bank.
Designed to shift investments from fossil fuels towards cleaner energies such as wind or solar power, carbon pricing instruments, which include emissions trading schemes, have been growing in popularity with the number of schemes either implemented or planned rising from 20 to 38 since 2012.
According to a report from the World Bank, the schemes now cover about 12 per cent of all greenhouse gas emissions and their combined value is estimated at $50bn (£32bn) a year worldwide, with $34bn from markets and the other $16bn in taxes.
"There is a growing sense of inevitability ... that there will be a price on carbon" for governments and businesses, Rachel Kyte, a vice president and special envoy for climate change at the World Bank, told a telephone news conference.
But despite signs of momentum ahead of a UN summit on climate change in Paris in December, the report says that most taxes or markets have prices too low to have any meaningful effect on climate change.
The study showed that prices ranged from less than a dollar a tonne of carbon dioxide in Mexico to $130 a tonne in Sweden, but in more than 85 per cent of cases the price was less than $10.
This is "considerably lower" than levels needed to help limit temperature rises to the UN's target of 2°C above pre-industrial times, the report said, though it did not recommend a target price.
However, after 73 countries and more than 1,000 companies and investors called for a price on carbon last year, Kyte said the group was becoming a "powerful coalition" that would make announcements before Paris.
A parallel report by the World Bank and the Organisation for Economic Cooperation and Development (OECD), with input from the International Monetary Fund, also laid out new principles for carbon pricing that it called FASTER.
This stands for Fairness, Alignment of policies and objectives, Stability and predictability, Transparency, Efficiency and cost effectiveness and Reliability and environmental integrity.
"Carbon pricing is central to the quest for a cost-effective transition towards zero net emissions in the second half of the century," said Angel Gurría, Secretary-General of the OECD.