This paper investigates the trade-off between managing the financial sustainability of public debt and addressing climate change. I explore the behaviour of debt limits for advanced economies, under the carbon budget constraints of the Paris Agreement. Various scenarios are analysed according to the short-term and long-term costs of emissions’ abatement and the political coordination among countries in the transition. The results indicate that, first, an uncoordinated green transition scenario, given the negative impact of emission reductions on GDP growth rates, implies lower debt limits than in a business-as-usual scenario with growing emissions and climate damages. On the contrary, if the green transition is coordinated globally, climate damages stabilize in the long-term. Debt limits, then, converge to levels which guarantee wider fiscal space compared to the business-as-usual scenario where climate damages generate plunging debt limits and shrinking fiscal spaces. From the evidence presented, it results as beneficial for countries to collaboratively and promptly transition towards mitigating climate impacts on growth and fiscal spaces. This will support sustainable public debt and the potential to finance the green evolution of our economies.