Dr Arunabha Ghosh is the CEO of the New Delhi-based think tank Council on Energy, Environment and Water and Professor Laurence Tubiana is the President and CEO of the European Climate Foundation

With nearly 200 signatories, the Paris Agreement remains the most comprehensive multilateral effort to mitigate the causes and address the effects of climate change. In November, at COP30, signatories will review their nationally determined contribution (NDC) climate plans for the third time.

Territorial emissions remain the core of countries’ commitments under the United Nations Framework Convention on Climate Change (UNFCCC). Countries decided that in the 1992 Rio Convention, based on jurisdiction over activities in their territory. However, the approach has a blind spot, which is that around 25% of global greenhouse gas (GHG) emissions are embedded in international trade.

G20 economies account for about 80% of these emissions. For Europe, the issue is particularly acute – the emissions imported by the EU are almost 40% of its overall GHG footprint, a conservative estimate that does not include emissions from deforestation.

Global dialogue on emissions in trade

That this issue has only recently entered the UNFCCC COP discussions reflects both its complexity and its growing significance in the context of global decarbonisation. A handful of UNFCCC members have begun acknowledging the importance of embedded GHG emissions in trade.

Illustrating this momentum, the last U.S. NDC even committed to “develop a new trade framework, built on accurate data on the emissions intensity of traded goods, that incentivizes reductions in industrial emissions across borders and supports the competitiveness of clean manufacturing.”

However, the debate has become largely tied to the concept of carbon leakage, usually for emission-intensive, trade-exposed, and politically sensitive industries, and to so-called “unilateral measures” to address this. Parties need to take a closer look at emissions embedded in trade, recognising the co-dependency that arises when one’s imports and consumption drive another’s production emissions.

Embedded emissions in the NDCs

Concretely, while embedded emissions—those associated with the production of traded goods—are not explicitly required under NDCs, countries could take several relevant steps. Parties are free to bring into their NDC any point of relevance related to their climate action, and this can include the evolution of their carbon footprint, including imported and exported emissions.

First, setting clear peaking or net-zero timelines within NDCs signals the expected emissions trajectory of a country, including those associated with its industrial base and traded goods. These announcements help trading partners and investors align expectations on the carbon intensity of supply chains.

Second, including economy-wide and sectoral targets allows countries to focus action where embedded emissions are most significant, such as heavy industry or energy-intensive supply chains. Sectoral targets offer policy clarity for industries, encourage early adopters of cleaner manufacturing processes, reduce the risk of greenwashing, and enable early decarbonisation and realignment of investment strategies in line with global climate goals.

Third, addressing the emissions intensity of tr