Trade Policies to Advance National Climate Plans

To meet the goals of the Paris Agreement, parties are required to prepare, communicate, and update their successive Nationally Determined Contributions (NDCs) every five years, aiming for the highest possible ambition. NDCs represent each country's commitment to reducing emissions, adapting to climate impacts, and promoting sustainable development. The first global stock-take under the Paris Agreement, which concluded in December 2023 at the United Nations Climate Change Conference (COP28), noted significant, albeit insufficient, progress toward the goals of the Paris Agreement. It called for a comprehensive transformation across all sectors, which is essential to lowering emissions, strengthening resilience, and mobilizing resources in a just and sustainable manner to accelerate and enhance efforts to meet the agreed-upon goals. Addressing the challenges of climate change requires a comprehensive and integrated approach that connects climate policy with broader economic and development strategies. Effective climate action needs to be closely linked to human capital development, industrial strategy, climate policy—including carbon pricing as part of the policy mix available to countries—and climate-aligned trade and investment policies. Moreover, integrating climate ambitions into national and subnational development plans, economic strategies, and sectoral policies is essential for promoting policy coherence and maximizing synergies between climate action, economic growth, and social development. In this context, international trade plays a critical role in advancing the objectives of the Paris Agreement and the SDGs. It facilitates access to environmentally friendly goods and services, technology, and knowledge—particularly those essential for the implementation of NDCs and mitigation and adaptation plans—while supporting the development of climate-resilient and resource-efficient value chains. This guide provides policymakers with a six-step process to better integrate trade-related measures into NDCs.