When will clean energy spending exceed military spending?

Why I may have been a tad premature in my 2026 prediction.

One of my predictions in our end of the year wrap-up was that 2026 year might be the year when global clean energy investment exceeds global military spending. This ended up being quoted in the New York Times last week by David Wallace-Wells in an excellent piece on the continuing green transition.

We had invested $2.3 trillion on clean energy in 2025 – renewables, nuclear, electric vehicles, heat pumps, and other decarbonization technologies. Global military spending when last I had checked (prior to this post) was $2.4 trillion in 2023 (as good data lags a bit behind for that measure). We had already reached a point where global clean energy spending this past year exceeded global military spending in 2022.

Unfortunately, I might have been a bit premature in my prediction of a crossover point, both because there has been some slowdown in the growth of clean energy spending after 2023 (though it is still increasing!), and because the advent of a more conflict-ridden era is causing the most rapid growth in global military spending since at least the Cold War.

Global energy transition investment increased by 8% from 2024, reaching a record $2.3 trillion, though this was slower growth than the ~20% year-over-year increase that has characterized the post-2020 period. However, after the start of the wars in Ukraine, Gaza, and other regional conflicts, global military spending has increased sharply, up 9.4% from 2023 to 2024 (the latest year with firm data available).

The figure below shows historical global clean energy spending (blue) and military spending (red), as well as projections for how they might grow in the future. These are of course rough guesses; it is possible for global military spending to slow down and clean energy spending to speed up (or vis versa).

Global clean energy investment from BNEF; global military expenditure from SIPRI. Figure generated with help from Claude Code.

The central scenario (clean energy at 12% compound annual growth rate – CAGR – and military at 5.5%) puts the crossover when annual clean energy investment flows would exceed annual global military expenditure for the first time at around 2029. The sensitivity case (clean energy at a more conservative 8%, matching the 2024 to 2025 observed rate) pushes that out to around 2036, while high clean energy grown and high military spending growth (8% CAGR) would cross over in 2032.

The 12% central case is reasonable: BNEF’s observed 2020–2025 CAGR was ~20%, and their base-case Economic Transition Scenario implies ~$2.9T/yr average over the next five years. The 5.5% military growth reflects the current rearmament cycle (NATO’s 3.5% GDP target, Asia-Pacific buildup, Middle East tensions), slower than 2024’s exceptional 9.4% but faster than the 3% to 4% that characterized the 2015–2022 period.

So while I’m hopeful that we will soon be investing more in clean energy technologies than we are spending on all the world’s militaries combined, we will probably have to wait a few more years to see this realized.

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