A Framework for Tracking the Energy Transition in 2026

Despite apparent headwinds, global energy transition investment hit a record $2.3trn in 2025, up 8% YoY. Amid this, one of the key challenges for companies and investors is measuring progress. How can one separate headlines from on-the-ground data and get a clear picture of global transition strategy in 2026?

Jefferies’ Sustainability & Transition Team set out to address that question in a new note, Energy Transition Download: Practical Tools to Track Macro, Sector & Companies. The resource aggregates the analytical tools and datasets most useful for understanding the transition and guiding thinking across the investor community.

Kaya Identity: A Framework for Tracking the Energy Transition

One of the clearest frameworks for assessing transition progress is the Kaya Identity, a formula that breaks global emissions into four underlying drivers: population, economic growth, energy efficiency, and the carbon intensity of energy.

As an equation, it reads as follows:

CO₂ emissions = Population × GDP per capita × Energy intensity of GDP × Carbon intensity of energy

In plain English, investors and economists use the formula to clarify why emissions are changing and where progress is coming from. Assessing the global transition through the Kaya framework, we see that:

• Total carbon emissions have grown more slowly over the past decade, rising roughly 0.3 percent per year, compared with 1.9 percent annual growth previously.
• The population continues to rise globally, but the pace of growth has slowed and now sits below one percent annually.
• Economic productivity continues to expand, with global GDP per capita increasing roughly two percent in 2025.
• Energy intensity—the amount of energy required to generate economic output—continues to decline globally, meaning economies are becoming more energy-efficient. However, the pace of improvement has slowed compared with the decade before the pandemic.
• The carbon intensity of energy remains the main decarbonization story of the past two decades. Renewable generation continues to expand, gradually shifting energy systems away from coal and other high-emitting fuels.
• Fossil emissions still grew over the past decade, but at a much slower rate than in earlier periods.

The Kaya framework is equally useful at the country level, where decarbonization pathways differ significantly. For example:

• China accounts for roughly 30 percent of global emissions.
  • In 2025, emissions were broadly flat, driven by improvements in energy intensity and carbon intensity. Coal emissions were stable, while gas and oil consumption rose modestly.

• The United States represents roughly 13 percent of global emissions. U.S. emissions increased 1.9 percent year-over-year in 2025, reversing recent declines.
  • The increase was driven primarily by colder weather, higher natural-gas prices—which led to greater coal burn—and rising electricity demand.

• India accounts for roughly 8 percent of global emissions. Emissions rose 1.4 percent year-over-year in 2025, below historical trends, with coal emissions increasing only modestly.

Following the Capital: Where Transition Investment Is Flowing

Now, it’s worth moving from the macro framework of Kaya toward real-world capital deployment and related market signals. In 2026, how much capital continues to flow into the energy transition, and where?

Last year, global energy-transition investment in the real economy reached approximately $2.3 trillion, with spending concentrated in electrified transport, renewable energy, and grid infrastructure.

• Electrified transport is now the largest segment of transition investment, with roughly $0.9 trillion deployed in 2025 across electric vehicles and charging infrastructure.
• Renewable energy attracted around $0.7 trillion, with solar generation leading among sub-sectors.
• Grid infrastructure continues to see accelerating investment, reaching $0.4 trillion.

Investment trends also vary significantly by region. China saw its first decline in real-economy transition spending since 2013, while both the United States and the European Union recorded increases. Among

major markets, investment growth was strongest in the EU and Japan, rising 43 percent and 18 percent year-over-year, respectively.

Tracking the Transition in 2026

Taken together, these frameworks can provide a clearer picture of how the transition is unfolding against a backdrop of shifting priorities and turbulent global markets. Progress continues on most fronts—but it may be more uneven, and more concentrated in certain countries and sectors, than in recent years.

The Jefferies Sustainability & Transition team tracks these dynamics across more than 800 public companies, alongside private-market activity across the sector. Follow along for more insights.