Over the last two weeks, world leaders gathered in Glasgow, Scotland – home of the first industrial revolution – to find a tangible solution to growing climate change issues. The 26th United Nations Global Climate Change Conference (COP26) urged both developed and developing countries to shift from coal-based energy to clean energy by rewiring investments from fossil fuel to environmentally friendly solutions. As a result of this significant pledge, Mongolia and other coal-dependent countries’ long-term economic strategies will be deeply affected.
Mongolia ratified the Paris Agreement in 2016 and has been following the necessary steps by making, reviewing, and updating its Nationally Determined Contribution (NDC) every five years. Mongolia’s national concern for climate change stems from multilayered environmental problems, including air pollution, land degradation, desertification, and mining malpractices that pollute the country’s water resources.
In 2019, Mongolia’s NDC set a target to reduce total greenhouse gas emissions by 14 percent compared to “business-as-usual” levels by 2030, using integrated national and cross-sectoral planning. However, at the Climate Ambition Summit in December 2020, the then-president of Mongolia, Battulga Khaltmaa, stated that Mongolia could achieve a higher NDC target of 27.2 percent reduction in greenhouse gases if conditional mitigation measures such as carbon capture and storage and waste-to-energy technology were implemented. The Ministry of Energy, Ministry of Transport, and Ministry of Agriculture would all need to be involved in mitigation efforts.
Reducing the usage of coal at a local level is a start. Individual coal usage for cooking and heating homes can be limited at the local level because of its direct environmental effects and toxicity. However, the use of coal for energy grids will most likely continue – not just in Mongolia but in other coal power dependent countries such as Russia, China, Japan, South Korea, Australia, and more. In Mongolia and other countries, securing the financial resources to fully replace the old system of coal-fueled power plants, both at a national and local level, is a major obstacle to fully switching to clean energy by 2030.
Moreover, while coal and air pollution are closely linked, particularly in the Ulaanbaatar area, the coal sector has major economic significance in Mongolia, which gives it precedence over any other issues. The most recent developments during COP26 will challenge Mongolia’s coal sector while opening investment opportunities in clean energy, technology, and green initiatives with its partners worldwide.
During Energy Day, 40 countries, including Canada, the United Kingdom, Poland, Chile, and Vietnam, pledged to shift away from coal and fossil fuel-based investments. Moreover, in a surprise move, in addition to China’s earlier pledge to halt funding for overseas coal plants that are part of Beijing’s Belt and Road Initiative, the United States and China – the world’s two largest greenhouse gas emitters – issued a joint statement pledging to cut fossil fuel usage. The joint declaration stated that “China will phase down coal consumption during the 15th Five Year Plan [which covers the period from 2026 to 2030] and make best efforts to accelerate this work.” According to the International Institute of Green Finance, China has already increased spending on clean energy initiatives.
At a time when Mongolia has been stepping up its supply of coal to China, China’s latest pledges — if followed through — are a warning sign for Mongolia’s coal sector at large.