Planet-warming greenhouse gas emissions kept rising in 2025 and country pledges to cut them are nowhere near where they need to be to avoid catastrophic climate change, but there were silver linings too.
The world is decarbonizing faster than was expected ten years ago and investment into the clean energy transition, including everything from wind and solar to batteries and grids, is expected to have reached a new record of $2.2 trillion globally in 2025, according to research by the Energy and Climate Intelligence Unit, a London non-profit.
“Is this enough to keep us safe? No it clearly isn’t,” said Gareth Redmond-King, international lead at the ECIU. “Is it remarkable progress compared to where we were headed? Clearly it is.”
This was also the year when renewable power capacity reached new highs, batteries became cheaper than ever and an unprecedented level of protection for the high seas became a reality. Artificial intelligence made climate research faster and more efficient, and weather forecasting more precise. And even as the ravages of climate change became more apparent, economies and people were able to access a growing number of instruments to shield themselves.
Here’s a look at these and other investments, innovations and policy changes that went right for climate in 2025:
Clean energy boom
Global investment in clean tech far outpaced what went into polluting industries. For every $1 funding fossil fuel projects, $2 went into clean power, according to the ECIU. For China, the EU, the US and India, the four largest polluters, it was $2.60.
Funds flowing into renewable power set another record in the first half of this year and were up 10% compared to the same period in 2024, to $386 billion, according to the latest available research by BloombergNEF.
Solar and wind grew fast enough to meet all new electricity demand globally in the first three quarters of 2025, according to UK-based energy think tank Ember. That means renewable capacity is set to hit a new record globally this year, with Ember forecasting an 11% increase from 2024.
Over the past three years, renewable capacity grew by nearly 30% on average. That puts the world within reach of the goal set at COP 28 in Dubai in 2023 to triple clean power by 2030.
China is leading the charge, with the world's largest polluter expected to have delivered 66% of new solar capacity, and 69% of new wind globally this year, according to Ember. Renewables also advanced in parts of Asia, Europe and South America.
AI’s climate benefit
The explosive power demand from artificial intelligence is also turning the tide on green technology investment, which had soured in recent years. For the first three quarters of this year, global clean tech investment, which was dominated by funding in next-generation nuclear reactors, renewables and other solutions that help power data centers, has already surpassed all of 2024. That marks the sector’s first annual increase since the 2022 peak.
And despite President Donald Trump’s rollback of climate policies, the S&P’s main gauge tracking clean energy is up about 50% this year, outperforming most other stock indexes and even gold. That same enthusiasm has also helped channel more capital into developing and upgrading the power grid, a backbone of the global energy transition.
The rise of artificial intelligence is also playing a role in enabling new climate solutions and expediting scientific research.
Waymo’s self-driving electric vehicles use AI to optimize route planning and minimize idling, reducing their carbon footprint. Bridge inspectors, meanwhile, deploy AI-enabled scanning systems to help safeguard critical infrastructure against extreme heat. AI is also helping scientists identify and count endangered species, and weather forecasters be more precise.
Cheaper batteries
Battery prices, long a sticking point in the electrification of a range of products, continue to decline.
Prices per kilowatt-hour of battery capacity fell by 8% to a record $108 this year and they’re expected to decline a further 3% next year, according to BloombergNEF. The decrease is a result of better manufacturing, cheaper chemical recipes and a glut of production, factors that have outweighed higher prices for the metals that go into batteries.
The swooning prices improve the economics on a range of products from lawn mowers to commercial drones. Carmakers, in particular, will be able to spur EV adoption with longer range, lower cost vehicles.
The largest unlock will arguably be in utility-scale storage systems that bottle up energy from solar and wind farms and trickle it out during peaks in electricity demand.
The US Energy Information Administration estimates 18.2 gigawatts of storage capacity will have come online in 2025, which represents a 77% increase over the prior year and nearly one-third of the country’s new power. These facilities are now one of the cheapest options for utilities looking to build a power plant; soon, they’ll be cheaper still.
International progress
In the year when Trump withdrew the US from the Paris Agreement and railed against clean tech, the global community scored some big wins.
Three years after being adopted, the so-called High Seas Treaty finally got the needed number of ratifications to come into force in January 2026. It will allow for the protection of the 60% of seas that don't fall within any country's jurisdiction, regulating what can and can't be done in international waters for the first time ever.
It sets the framework for establishing marine protected areas and requires that environmental impact assessments be conducted for activities that could have a harmful or an unknown impact on the high seas. This comes at a time when there’s growing interest in using the ocean to absorb and store carbon dioxide and to mine the rare minerals sitting on its bed.
The International Court of Justice, meanwhile, issued a first-of-its-kind ruling in favor of climate action, which promises to transform the way that NGOs and campaigners hold governments to account. In July, the court determined that countries risk being in violation of international law if they don’t work towards keeping global warming to the 1.5C threshold agreed at the Paris climate conference in 2015. It’s an advisory opinion, but representatives for Vanuatu, the country that brought the case, said it could be used to put pressure on governments to do more on climate change.
Climate policy
While the US rolled back its environmental policy, others pressed ahead. Australia, Denmark and the UK announced more ambitious emissions goals. While China was more timid in its goals, a majority of experts expect it to beat its target to cut emissions by 7 to 10% from peak levels by 2035, given the speed at which it’s expanding its clean energy capacity.
Global capitals historically dominated by cars have started to push back, seeking to encourage their residents to walk and cycle instead. Cities in Europe are further down this path, but in January, New York City introduced measures designed to dissuade drivers from entering certain parts of the city. By April it was already apparent that the change was reducing congestion and cutting journey times. More recently, researchers have found a 22% drop in harmful particulate pollution in the area where charges are enforced.
Overall, climate policy shows signs of becoming firmly embedded in national governmental policies, the ECIU found in its research. The Trump administration’s rollbacks on key climate and environmental regulations mean the share of the global economy covered by net zero targets fell to a little bit over 80%, down from more than 90% in 2024, but state-level targets and policies are holding the line and preventing that number from falling further.
Wins for adaptation
Meanwhile, climate change adaptation is also attracting more funding. Billionaire philanthropist Bill Gates’s foundation announced in November that it will commit $1.4 billion over four years to expand access to innovations that help farmers in Africa and Asia become more resilient. This year’s UN annual climate summit also concluded with a new agreement to triple adaptation finance to $120 billion per year by 2035.
Hurricane Melissa — a tragedy that killed dozens of people in Jamaica and wiped out roughly 40% of the country’s annual economic output — also served as a dark example of how catastrophe bonds can help transfer part of climate risks to capital markets. The deadly storm triggered a full payout of Jamaica's $150 million cat bond, easing doubts about whether such instruments work.
As climate change brews more extreme weather events, catastrophe bonds are also emerging as a new tool to fund disaster preparedness. These financial instruments, designed to pay out a specific amount if damage from climate-fueled natural disasters is severe, have traditionally been used to cover losses. But this year, hurricane-prone North Carolina has expanded the use case by issuing a new cat bond that incentivizes adaptation.
If no major losses occur, $2 million returns to the North Carolina Insurance Underwriting Association, the bond issuer, which then uses the money to help install wind-resistant “super roofs.” As more homeowners add these roofs, the annual pricing on the bond resets to factor in the changing exposure.
The new bond drew $600 million in investor interest, almost doubling its initial offering. NCIUA, which serves as the state-sponsored insurer in North Carolina, also expects the new resilient roofs to help lower insurance claims and cut back on reinsurance cost.
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Read more articles by Laura Millan, Coco Liu, Olivia Rudgard, Kyle Stock
