Carbon pricing and regulatory risk are critical factors influencing corporate and governmental approaches to climate change mitigation. Carbon pricing involves assigning a cost to greenhouse gas emissions, typically through carbon taxes or cap-and-trade systems, incentivizing emitters to reduce their carbon footprint. Regulatory risk refers to the uncertainty businesses face regarding current or future environmental policies, including potential tightening of emissions standards or introduction of new carbon pricing mechanisms. The interplay between carbon pricing and regulatory risk affects investment decisions, operational costs, and long-term strategic planning. Firms exposed to higher regulatory risk may experience increased costs or asset stranding if regulations become more stringent, while clear and stable carbon pricing can encourage innovation and low-carbon technologies by internalizing environmental externalities. Conversely, unpredictable regulatory environments can deter investment and complicate compliance efforts. Overall, understanding and managing regulatory risk alongside carbon pricing mechanisms is essential for aligning economic activities with climate goals, promoting sustainable development, and ensuring market stability in the transition to a low-carbon economy.