
Global Transition To Net Zero Will Face Challenges In Emerging Economies Reliant On Foreign Currency Debt
The global net-zero transition is headed for a “structural wall”, not in technology, but in debt. Emerging economies need $2.4 trillion annually for green projects, yet much of this is financed in dollars and euros. When local currencies fall, debt balloons, a “green debt trap” that strangles climate ambition. The World Economic Forum proposes a novel solution: a three-tier currency risk-sharing facility that distributes exchange-rate volatility across markets, sovereigns, and international partners. Egypt, already targeting 10GW of renewables, could pioneer this model. Because the green transition won’t succeed if the bill comes due in a currency nations can’t afford to repay.








