In 2025, global investment in clean energy reached a record high of $2.2 trillion, reflecting significant strides in the transition to sustainable energy, despite ongoing increases in greenhouse gas emissions. Research conducted by the Energy & Climate Intelligence Unit (ECIU), a London-based nonprofit, highlights both the critical challenges and notable achievements in climate progress this year.
While emissions continued to rise, the pace of decarbonization has accelerated faster than anticipated a decade ago. According to Gareth Redmond-King, the international lead at ECIU, “Is this enough to keep us safe? No, it clearly isn’t. Is it remarkable progress compared to where we were headed? Clearly it is.” The global clean energy boom is not only crucial for environmental sustainability but also serves as a significant economic driver.
Clean Energy Investment Surges
Investment in clean technologies has outstripped funding for fossil fuel projects, with $2 allocated to clean power for every $1 invested in fossil fuels. For major polluters like China, the EU, the U.S., and India, this ratio was even higher at $2.60 to $1. In the first half of 2025, renewable power investment reached $386 billion, a 10% increase compared to the same period in 2024, according to BloombergNEF.
Solar and wind energy sources met all new global electricity demands during the first three quarters of 2025, and renewable capacity is expected to rise by 11% compared to 2024. Over the past three years, renewable capacity has grown by nearly 30% on average. This remarkable growth positions the world closer to achieving the goal set at COP 28 in Dubai in 2023 to triple clean energy capacity by 2030.
China led the charge, contributing 66% of new solar capacity and 69% of new wind energy globally this year, with significant advancements also noted in parts of Asia, Europe, and South America.
Technological Innovations and Adaptations
The increasing demand for power from artificial intelligence (AI) is reshaping the landscape of green technology investments. In the first three quarters of 2025, global clean tech investment surpassed all of 2024, marking the sector’s first annual increase since its peak in 2022. Despite the rollback of climate policies under former President Trump, the S&P’s primary clean energy index surged by approximately 50% this year, outperforming many other stock indices.
Innovations in AI applications are enhancing climate solutions. For instance, Waymo’s self-driving electric vehicles utilize AI for optimal route planning, minimizing fuel consumption. AI is also improving bridge inspections and wildlife monitoring, while enhancing weather forecasting accuracy.
Battery prices, a critical factor in the electrification of numerous products, fell by 8% this year to a record $108 per kilowatt-hour. This decline is attributed to improved manufacturing processes and competitive production levels, outpacing cost increases in battery materials. The U.S. Energy Information Administration projects that 18.2 gigawatts of storage capacity will come online in 2025, marking a 77% increase from the previous year.
Global Policy Developments
Despite challenges, significant international progress was achieved in 2025. The High Seas Treaty received the necessary ratifications to come into force in January 2026, establishing protections for international waters and requiring environmental impact assessments for activities that may harm the high seas. This treaty reflects a growing global commitment to managing ocean resources sustainably.
In a landmark ruling, the International Court of Justice issued an advisory opinion affirming that nations risk violating international law if they fail to pursue efforts to limit global warming to the 1.5°C threshold established at the 2015 Paris climate conference. This ruling offers new avenues for NGOs and other advocates to hold governments accountable for their climate commitments.
On the national front, while the U.S. rolled back several environmental regulations, countries like Australia, Denmark, and the UK announced more ambitious emissions targets. Experts expect China to exceed its goal of cutting emissions by 7% to 10% from peak levels by 2035 due to its rapid expansion of clean energy capacity.
Cities are also adapting their infrastructure to promote sustainability. For instance, New York City implemented measures to discourage vehicle use in specific areas, resulting in reduced congestion and a 22% decrease in harmful particulate pollution.
Funding for Climate Adaptation
Funding for climate change adaptation initiatives is gaining momentum. In November, the Bill and Melinda Gates Foundation committed $1.4 billion over four years to enhance access to innovations that help farmers in Africa and Asia. Additionally, the recent UN climate summit established a target to triple adaptation finance to $120 billion annually by 2035.
The devastation caused by Hurricane Melissa, which resulted in significant loss of life and economic output in Jamaica, highlighted the role of catastrophe bonds in climate risk management. Jamaica’s $150 million catastrophe bond provided a full payout, demonstrating the effectiveness of such financial instruments. North Carolina is also exploring innovative approaches, having issued a new catastrophe bond that incentivizes the installation of wind-resistant roofs, attracting $600 million in investor interest.
These developments illustrate a growing recognition of the need for both mitigation and adaptation strategies in the face of climate change. As the world invests in clean energy and innovative technologies, the dual challenge of reducing emissions and adapting to climate impacts continues to shape global dialogue and action.
