This study looks thoroughly into the important relationship between carbon risk assessment and investment decision-making, with a specific emphasis on the consequences of various carbon pricing regimes. Understanding how carbon risk and pricing regulations effect investment portfolios is critical in todays world, when environmental sustainability and battling climate change are vital. To clarify the topic, the study conducts a thorough assessment of current research, evaluating the several ways in which carbon price influences investment decisions. It also offers light on carbon risk measurement approaches and frameworks, providing critical insights into the complexity of environmental economics. Furthermore, the paper adds empirical case studies to its narrative, offering real-world context to theoretical frameworks and shining light on the actual implications of carbon risks and price on investment strategies. The findings are useful for investors, policymakers, and scholars attempting to navigate the complex environment of sustainable investing in a carbon-constrained society.