Despite a troubling increase in greenhouse gas emissions, 2025 brought significant advancements in the global clean energy sector. Investment in clean energy is projected to reach a record $2.2 trillion, according to research by the Energy & Climate Intelligence Unit (ECIU). This surge highlights the ongoing transition towards renewable power, even as country commitments to reduce emissions fall short of what is necessary to avert severe climate change.
Gareth Redmond-King, international lead at ECIU, acknowledged the mixed news: “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 year marked new highs in renewable energy capacity and advancements in battery technology, alongside heightened protection for international waters.
Investment in clean technologies outpaced funding for fossil fuel projects, with every $1 allocated to fossil fuels matched by $2 for clean energy initiatives. In the case of the four largest polluting nations—China, the EU, the U.S., and India—the ratio was even higher at $2.60 for renewables. According to the latest data from BloombergNEF, funding for renewable power reached $386 billion in the first half of 2025, up 10% from the previous year.
Renewables on the Rise
The rapid growth of solar and wind energy has met all new electricity demand globally during the first three quarters of 2025. The UK-based energy think tank Ember forecasts an 11% increase in renewable capacity from 2024, positioning the world closer to the goal set at COP 28 in Dubai to triple clean power by 2030. China led this expansion, contributing 66% of new solar capacity and 69% of new wind power.
Artificial intelligence (AI) also played a pivotal role in enhancing climate research and technological investments. Demand from AI applications has revitalized green technology funding, which had previously stagnated. The clean tech sector has seen investments surpassing all of 2024’s total, marking the first annual increase since the peak in 2022. Despite setbacks from previous U.S. climate policies, the S&P’s clean energy index rose by approximately 50% this year, outperforming many traditional stock indices.
Battery Prices Drop, Innovations Flourish
Another bright spot in climate progress is the continued decline in battery prices. Costs per kilowatt-hour dropped by 8% this year to a record $108, with expectations for further reductions in 2026. This trend stems from improved manufacturing processes and increased production capacity, making electric vehicles (EVs) more affordable and accessible. The U.S. Energy Information Administration estimates that 18.2 gigawatts of new storage capacity will come online in 2025, marking a 77% increase over the previous year.
Internationally, the High Seas Treaty is poised to take effect in January 2026, following necessary ratifications. This landmark agreement will enable the protection of the vast areas of ocean that fall outside national jurisdictions, establishing guidelines for environmental assessments in international waters.
In a landmark ruling, the International Court of Justice determined that countries may violate international law if they fail to work towards limiting global warming to the 1.5°C target set in the 2015 Paris Agreement. This advisory opinion could significantly influence how non-governmental organizations press governments to enhance their climate action efforts.
Climate Adaptation Gains Traction
Funding for climate change adaptation is also on the rise. The Bill & Melinda Gates Foundation announced a commitment of $1.4 billion over four years to bolster agricultural resilience in Africa and Asia. Additionally, this year’s UN climate summit resulted in a new agreement to increase adaptation finance to $120 billion annually by 2035.
Tragic events, such as Hurricane Melissa— which devastated Jamaica, killing dozens and costing approximately 40% of the nation’s economic output—highlight the need for innovative financial solutions like catastrophe bonds. These instruments have begun to gain traction as a means of managing climate risks, evidenced by Jamaica’s successful payout of a $150 million cat bond in response to the storm.
North Carolina has adopted a new cat bond to incentivize adaptation measures. If no significant losses occur, $2 million returns to the issuer, allowing for the installation of wind-resistant roofing systems. This initiative attracted $600 million in investor interest, nearly doubling its initial offering, and signals a shift towards proactive disaster preparedness.
As climate change continues to intensify, the strides made in clean energy investments, technological advancements, and international cooperation provide a beacon of hope in the ongoing fight against global warming.
