Everyone is talking about carbon budgets (ourselves included). From British Prime Minister Kier Starmer’s carbon budget delivery plan to the International Panel on Climate Change’s net zero stabilization efforts, CO2 accounting is now mainstream. The Potsdam Institute for Climate Research’s Carbon Clock even offers a countdown to depletion (roughly 21 years). But Earth’s carbon budget isn’t the only budget that matters when it comes to climate action. Equally important are sovereign budgets … and these balance sheets look increasingly red.
Leaders at the World Economic Forum meeting in Davos in January were clear: There is a crisis of sovereign debt. In 2024, global public debt officially passed $100 trillion, an…