Green Transition Financing in Emerging Economies: Sovereign Wealth, Industrial Policy, and the Race to Net Zero

The transition to net-zero carbon emissions poses acute financing challenges for emerging economies that simultaneously face development imperatives, fiscal constraints, and legacy hydrocarbon dependencies. This essay compares the strategic use of sovereign wealth funds and state-directed industrial policy in Japan, Brazil, and Kuwait, arguing that institutional path dependencies create fundamentally different feasibility constraints for green transition financing. We find that no single financing model is universally applicable and propose a diagnostic framework for matching transition finance instruments to national institutional contexts.