The sources and sinks of energy for transient waves in the Martian atmosphere are investigated, applying diagnostic techniques developed for the analysis of terrestrial baroclinic waves to output from a Mars General Circulation Model. These diagnostic techniques include the vertically averaged eddy kinetic energy and regression analysis. The results suggest that the primary source of the kinetic energy of the waves is baroclinic energy conversion in localized regions. It is also shown that there exist preferred regions of baroclinic energy conversion. In addition, it is shown that downstream baroclinic development plays an important role in the evolution of the waves and in the baroclinic energy conversion process. This is the first time that evidence for downstream baroclinic development has been found for an atmosphere other than the terrestrial one.