The transition to sustainable energy is essential to mitigate the detrimental effects of climate change; however, investment gaps persist in the renewable energy sector. Identifying the underlying factors driving these gaps is crucial for advancing global climate mitigation efforts. This chapter investigates this issue through the lens of global resource allocation. We calculate international resource misallocation between 2000 and 2019 based on theoretical model and empirically assess the impact of market distortions on public investment in renewable energy across different countries. The findings revealed a significantly negative relationship between market distortion and public investment in renewable energy. This effect is most pronounced in developing and least developed countries, particularly in Africa. Strengthening governance capacities, such as improving electoral processes and controlling corruption, can mitigate the adverse effects of market distortions. We also demonstrate that financial development can reduce international resource misallocation, particularly during the pre-financial crisis. These findings highlight the critical importance of addressing global resource misallocation to enhance renewable energy investment, promoting sustainable economic growth and development.