Despite ongoing challenges, the year 2025 saw significant advancements in the global clean energy sector. While greenhouse gas emissions continued to rise, the world made notable progress in its transition to renewable energy. Global investment in clean technology reached a record $2.2 trillion, according to the Energy & Climate Intelligence Unit (ECIU). This marks a substantial increase in funding for initiatives aimed at mitigating climate change.
The ECIU’s international lead, Gareth Redmond-King, acknowledged the mixed results. He stated, “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.” This balance of optimism and caution highlights the complexities of addressing climate change effectively.
Record Investment and Renewable Capacity Growth
Investment in clean technologies has outpaced that in fossil fuels, with every $1 allocated to fossil fuel projects attracting $2 for clean power. In the case of the four largest polluters—China, the European Union, the United States, and India—the ratio is even more favorable at $2.60. Research from BloombergNEF indicates that funding for renewable energy surged to $386 billion in the first half of 2025, a 10% increase from the same period in 2024.
Renewable energy sources such as solar and wind were pivotal in meeting new electricity demand globally. According to Ember, a UK-based energy think tank, renewable capacity is projected to rise by 11% from 2024 levels, with China leading the way by contributing 66% of new solar capacity and 69% of new wind capacity.
Artificial intelligence has also played a critical role in enhancing climate research and technology. AI-driven solutions are optimizing energy use in various sectors, from transportation to infrastructure management. For instance, Waymo’s self-driving electric vehicles utilize AI for efficient route planning, significantly reducing carbon emissions.
Battery Technology and Climate Policy Innovations
The cost of batteries, essential for the electrification of various sectors, has seen a notable decline. Prices dropped by 8% to $108 per kilowatt-hour in 2025, with further decreases expected. This reduction is attributed to advancements in manufacturing and a surplus in production, making electric vehicles more accessible for consumers.
On the policy front, international cooperation yielded significant milestones. The High Seas Treaty, ratified in early 2025, aims to protect vast areas of ocean unregulated by any nation. This new framework will facilitate the establishment of marine protected areas, ensuring better management of international waters.
In addition, the International Court of Justice issued a groundbreaking advisory opinion emphasizing that countries must strive to limit global warming to the 1.5°C target set during the Paris Agreement in 2015. This ruling could empower non-governmental organizations and advocacy groups in their climate action efforts.
While the U.S. faced a rollback in climate policies under the previous administration, nations like Australia, Denmark, and the UK advanced their emissions reduction commitments. Cities worldwide have also started to prioritize sustainable urban transport, with New York City implementing measures to reduce vehicular congestion and pollution.
Adaptation strategies received increased attention and funding in 2025. The Bill and Melinda Gates Foundation pledged $1.4 billion over four years to enhance agricultural resilience in Africa and Asia. Following the devastation of Hurricane Melissa, which severely impacted Jamaica’s economy, catastrophe bonds gained traction as a financial tool for mitigating climate risks. The issuance of new bonds in North Carolina further demonstrated innovative approaches to managing climate-related financial exposure.
Overall, 2025 encapsulated a year of cautious optimism in the climate sector, with record investments and significant policy advancements. The ongoing challenges underscore the importance of sustained efforts to combat climate change in the coming years.
