Climate change is our biggest challenge. But great challenges also present great opportunities.

11 Dec 2015

Climate change is a reality and it is no longer a discussion as to whether there is such a thing as climate change and whether or not it is driven by us, the people of the planet. Climate change is impacting our lives and evidence show that climate change is a consequence of human activity. Carbon dioxide is the primary greenhouse gas emitted through human activities that contributes to climate change. While carbon dioxide is naturally present in the atmosphere, human activities are altering the carbon cycle—both by adding more carbon dioxide to the atmosphere and by influencing the ability of earth to remove it from the atmosphere through the continued destruction of natural sinks, like forests, grass- and peat-lands. The main human activity that emits carbon dioxide is the combustion of fossil fuels (coal, natural gas, and oil) for energy and transportation which corresponds to almost 60% of total global greenhouse gas emissions.

As a result, it is likely that our planet will warm by at least 2.7 degrees by the end of the century if all countries stick to their commitments made in Paris at the ongoing UN Climate Conference. In the worst case of continued inaction temperatures could rise as much as 4 degrees. This has increasing consequences on human life, serious social impact and economic losses. Climate change increases people’s vulnerability through environmental degradation, reduced water supply, food insecurity and forced changes to livelihoods as well as migration. Climate change is universal as it threatens development progress in countries rich and poor and is both a results of, and a threat to current development patterns. It affect the poorest the most as they live in areas more exposed to rising sea levels, landslides or droughts and have fewer coping mechanisms to recover from the consequences. The poorest are also often directly dependent on the ecosystem for their livelihood and need to make the biggest adjustments to adapt to the changing climate.

To tackle climate change, the whole world must develop differently. All of us must change consumption and production patterns and this requires engaged citizens and bold leadership. The choice is not between green or growth; we have to make growth climate and environmentally friendly and it is entirely possible. This is what is behind the people and planet focused 2030 Agenda for Sustainable Development and the Sustainable Development Goals agreed to by world leaders in September.

The most effective way to reduce carbon dioxide emissions is to reduce fossil fuel consumption. This includes energy efficiency, energy conservation and reducing energy use, switch fuels to less carbon dioxide emitting fuels, and carbon capture and sequestration. A significant reduction in emissions now can mitigate the effects of climate change in the future.

Few words about coal

The energy sector is the main sector contributing to climate change through greenhouse gas emissions and coal is the main contributor in the energy sector. Overall, coal provides about 41% of the total energy need of the world and coal is used to produce 68% of the world’s steel output. There will undoubtedly be increased pressure to “keep coal in the ground” to reduce greenhouse gas emission drastically and safe the planet from the irreversible effects of climate change. However it is estimated that global energy need will double from 2009 to 2035. All scenarios show that with growing energy demand around the world, coal continues to play an important role in the global energy mix through to 2035 and most likely beyond.

While it is possible to improve efficiency and to clean coal from some pollutants, using coal for energy production will always generate carbon dioxide. This carbon dioxide is either released into the atmosphere and contribute to global warming and climate change or alternatively captured and stored.

Mongolia – a fast developing country with lots of coal

Mongolia is a growing economy fuelled to a large extent by the extractive industries sector. People want, and have the right to, a share of the development dividend. All Mongolians should have better lives in modern homes with the modern conveniences. This is development and it will require additional energy supply, and a lot of it.

Mongolia is also extremely vulnerable to climate change due to its geographic location, vulnerable ecosystem, people’s livelihoods and economy. In the past 70 years, the mean temperature increased by 2.07°C, considerably faster than global average. Mongolia is ranked 8th among over 100 countries in the Global Climate Risk Index of 2014. Due to the dependency of natural resources, the most vulnerable groups to climate change are nomadic herders.

In Mongolia, the source of energy is almost exclusively coal. This is true both for large scale energy generation through power plants as well as in individual dwellings, especially in urban areas. Both emits huge amounts of greenhouse gases and also pollute the air that Mongolians breathe. There is a strong case to be made for improving the efficiency of the coal power plants and the energy distribution network as well as enhancing energy efficiency in buildings in addition to changing the energy mix in order to lower greenhouse gas emissions. However, the business case in this regard is difficult if only looking at short-term monetary aspects as coal is so abundant and cheap in Mongolia.

Mongolia also exports coal, mainly to China. Mongolian coal export corresponds to 19% (2014) of total exports and corresponds to approximately 4% of Mongolia’s GDP. Also, the export of oil, another fossil fuel contributing to greenhouse gas emissions and climate change, has increased significantly in Mongolia and the monetary value of the oil export was in 2014 close to that of the coal.

Towards a sustainable development path for Mongolia that does not hinder growth

Mongolia has an ambitious green development strategy. This strategy sets a target for renewable energy and for natural resource management. Mongolia also submitted it’s Intended Nationally Determined Contributions (INDCs) to the UNFCCC with a peak carbon dioxide emission around 2030.

With China now addressing pollution in its cities and with its peak target of carbon dioxide emissions in 2030 as well, many see the provision of energy to China as a good development path for Mongolia. What would such energy export to China look like? The worst case would be the construction of coal power plants in Mongolia exporting energy to China and importing pollution and greenhouse gas emissions. If coal fueled energy is exported, it should be so at full costs including capturing and storing carbon dioxide as well as a premium for other negative environmental and health impacts. The best model would be long-term investments in renewable energy in Mongolia for Mongolian consumption and for export setting up Mongolia as a regional renewable energy provider.

This is what the Sustainable Development Goal 7 is about. Development with affordable, reliable, sustainable and modern energy as an important catalyst for growth. We need to stop thinking of sustainability as an add-on. Transitioning the energy sector is not easy for any country but it is vital for the planet’s wellbeing that all countries get on the right track toward low-carbon economies instead of repeating the development pattern of the industrialized countries. No country can afford any longer a development path based on principles of pollute now and clean up later. This is especially true with the effects of climate change already wiping out development gains in many countries. 

Uruguay has in less than 10 years slashed its carbon footprint and lowered electricity costs without major government subsidies. The four key factors that made this possible were stable governance with a consistent policy and a supportive regulatory environment; helpful natural conditions with good wind, decent solar radiation and lots of biomass from agriculture; strong public companies that can be reliable partners for private firms; and innovative financial model using carbon finance and swaps lowering investment risks and costs. Mongolia have the same basic ingredients.

To find the Mongolian sustainable pathway, focus should be on investing in energy efficiency, review tariffs and subsidies to see how incentives can be provided for lowering energy consumption and shifting towards renewable energy. One example of such policy could be a progressive household tariffs charging large energy consumers a premium that can then be used for green energy investments providing energy access to the poor. Another ingredient in the policy mix is to deregulate the power sector to open the space for more private investment and smaller scale energy production facilities. There are opportunities to tap into innovative climate financing models as Mongolia is a global carbon sink and by further protecting its forests and steppe landscapes to absorb carbon dioxide from the atmosphere, further financing for an energy transformation can be leveraged. More than anything, what is needed in Mongolia is leadership and political will to take on the shift from coal to renewable energy. Climate change is a major development challenge for Mongolia, but in this great challenge sits also great opportunities in taking a sustainable development pathway that supports growth and jobs, for today and tomorrow. 

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