Mongolia is facing significant challenges from climate change and the global transition to a low-carbon economy, according to a new report by the World Bank Group. The Mongolia Country Climate and Development Report (CCDR) highlights the need for urgent actions to enhance climate resilience while reducing reliance on coal, a major economic driver.
World Bank Country Director for China and Mongolia, Mara K. Warwick, emphasized that "while challenging, climate action presents Mongolia with opportunities to achieve important development benefits." She added that strategic policies balancing climate concerns with economic objectives could lead to a more diversified and resilient economy.
The report notes an increase in natural disasters like dzuds—severe weather events with frigid temperatures—and floods, which are becoming more frequent and severe. These events threaten livelihoods and developmental progress in Mongolia. Climate projections suggest these risks will worsen by mid-century.
Mongolia's dependence on coal exports poses economic risks as global demand for fossil fuels decreases. Without adaptation measures, simulations show that several high-impact climatic and economic events could jeopardize up to 20% of Mongolia’s annual economic output over three years.
Kim-See Lim, IFC’s Regional Director for East Asia and the Pacific, stated that "to achieve Mongolia’s climate and development goals, additional investment of more than $10 billion (in today’s money) is needed over the next 25 years." Lim highlighted the importance of fiscal and policy reforms to mobilize private capital for energy transition efforts.
The report acknowledges Mongolia's commitment to reducing greenhouse gas emissions by 22.7% by 2030 but stresses the need for further action. Currently ranked ninth globally in per capita emissions, Mongolia must lower emissions further and build nature-based carbon sinks.
Recommendations include increasing climate resilience in rural areas through better management of natural resources, preparing for reduced coal demand while exploring other mineral opportunities, reforming electricity tariffs, investing in energy efficiency, enhancing disaster response financing, and improving monitoring of adaptation efforts.
Country Climate and Development Reports (CCDRs) are core diagnostic tools from the World Bank Group integrating climate change with development considerations. They aim to help countries prioritize impactful actions that reduce emissions while achieving broader development goals.