DOMESTIC AND DIPLOMATIC CLIMATE CHANGE INITIATIVES

C O N F I D E N T I A L ULAANBAATAR 000349

SIPDIS

STATE FOR EAP/CM, EAP/K, EAP/J, S/NKP, OES/EGC, OES/E
STATE FOR OES/ENRC, OES/ENV, DRL/AWH, EEB/ESC/IEL FOR PETER
SECOR STATE FOR P/IO/UNP
ENERGY PASS TO PI FOR KAY THOMPSON, THOMAS CUTLER, JEFFREY
SKEER AND CRAIG ZAMUDA
HQ EPA WASHDC PASS TO INTERNATIONAL

E.O. 12958: DECL: 12/01/2019
TAGS: PGOV PREL SENV ENRG TRGY MG
SUBJECT: DOMESTIC AND DIPLOMATIC CLIMATE CHANGE INITIATIVES

Classified By: Political Officer Dan Rakove for reasons 1.4 (b) and (d)


1. (C) SUMMARY: Acutely aware of its vulnerability to a
changing climate, Mongolia is pursuing initiatives both
domestically and regionally to foster clean energy and
conservation. Diplomatically, the GOM has assembled
delegates from China, Japan, Russia, North Korea, and South
Korea at three conferences starting in October 2008 to foster
cooperation in emissions mitigation and adaptation to
environmental changes. Japanese hesitation, however,
thwarted Mongolia's goal of holding a joint Northeast Asia
Summit on Climate Change at UNGA in October this year.
Domestically, Mongolia is pursuing clean energy and
forestation projects with striking determination. This is a
product not only of the Gobi-based dust storms and the
noxious fumes from urban coal combustion but also out of a
desire for greater energy independence from Russia.
Mongolia's determination is undergirded by strong government
will and tacit recognition that Mongolia's per capita
emissions are far higher than other comparable developing
economies. This dynamic creates an opportunity for USG
engagement to foster emissions mitigation while potentially
providing a model for similar endeavors with other developing
nations. END SUMMARY
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Environmental Vulnerability
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2. (U) Patterns documented by satellite imagery and the
Ministry of Nature, Environment and Tourism's (MNET)
Institute of Meteorology and Hydrology (IMH) are generating
alarm among officials. Although winters that already reach
-50 Celsius are growing colder, Mongolia's average annual air
temperature paradoxically increased more than two degrees
Celsius between 1940 and 2008. The comparable global rise in
this period is only one third of this level. IMH estimates
that by 2100, the local average temperature will rise by an
additional 3.5 degrees Celsius. With terrain varying from
Central Asian desert to Siberian forest, the consequences of
Mongolia's sensitivity to carbon emissions vary.
Nevertheless, long term patterns are distinct and well
documented in the inaugural 2009 Mongolia Assessment Report
on Climate Change (MARCC).
Rapid desertification: More than 70 percent of the grassland
is affected; the Gobi Desert is rapidly expanding into the
steppes. Dust storms grow more frequent.
Increased frequency of severe weather: Heavy rains lead to
increased flooding; heavy winter snows obstruct what pastures
remain. Over the last 40 years, the number of annual heat
waves more than doubled.
Disappearing water resources: Precipitation is increasing in
the eastern regions and decreasing in the western ones. Yet
even in the east, this is offset by rising temperatures and
attendant elevated rates of evaporation. Glaciers in Western
Mongolia are vanishing. According to the IMH surface water
inventory, some 15 percent of rivers, 25 percent of springs,
and 30 percent of lakes and ponds dried up in the last
decade. Together with the melting of permafrost, or frozen
soil that lies beneath 60 percent of the country, there is a
distinct process of national desiccation underway.
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Economic Vulnerability
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3. (U) Climate change affects animal husbandry most severely.
In addition to desertification, heavy winter snows prevent
animals from reaching forage, resulting in further loss of
livestock. Director of the IMH, G. Sarantuya, told us that
as a result of depleted water supplies and grassland yields,
herders and their dependents are already migrating away from
the arid southern regions in search of greener pastures.
Still others forsake the cowboy lifestyle altogether, moving
into peri-urban coal-burning ger districts and contributing
to the already high rate of unemployment. Although the
number of herders more than tripled from 1990 to number
420,000 in 2000, their ranks have since diminished by more
than 50,000 ) nearly two percent of the national population.

4. (U) Water scarcity will increase the cost of business for
all. This also further complicates the ambitions of GOM
officials to construct water-intensive power generation and
mineral processing facilities. For example, coal deposits
must be shipped abroad for washing. Mongolian brown coal

(lignite) is notoriously carbon heavy. The burning of coal
rings the capital with a sooty halo throughout the six-month
winter.
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Carbon Emissions
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5. (U) As of 2006, the nation released some 15.6 billion tons
in total of carbon dioxide equivalents. That is equivalent
to six tons per capita and significantly exceeds
corresponding levels in comparative developing countries. It
is even slightly higher than the global average. The
reliance upon coal throughout the severe winter and the
methane-producing livestock sector leads to such significant
discharges.

6. (U) Energy production, both state-owned and private,
generates nearly 60 percent of total emissions. Sixty-six
percent of energy produced domestically is derived from local
carbon-intensive coal deposits. Twenty-two percent of energy
is in turn generated from oil, largely diesel. Absent
domestically, this fuel is imported chiefly from Russia and
mostly used to power transportation and power plants in the
west. The remaining eleven percent of energy is produced
from renewable sources, largely hydro plants in the north and
west of the country. In comparison to energy produced
domestically, that which is imported from Russia is largely
derived from coal. Of all the energy consumed, a full 40
percent is used for heating.

7. (U) The agricultural sector produces more than 35 percent
of carbon emissions, largely in the form of methane. There
are now some 40 million head of livestock providing
livelihood directly or indirectly to half of the population
and nourishment to all. These include 18 million goats, 17
million sheep, two million cattle, two million horses and 300
thousand camels. Significant overgrazing contributes to net
GHG emissions through the devouring and trampling of carbon
storing fodder, and pastures are not managed sustainably.

8. (U) The remaining five percent of carbon emissions derive
from industry and waste management practices. The production
of lime, cement, food products and beverages produce some
four percent; methane emissions from domestic and commercial
solid and liquid waste account for the remainder. Solid
waste is currently disposed of in landfills without
processing.
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Renewable Energy Initiatives
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9. (U) Despite economic difficulties only now starting to
subside, the GOM took significant initiatives to foster clean
energy despite plentiful and cheap local coal, estimated at
150 billion tons. To date the focus has been on the western
provinces where the national grid does not reach. In 2000
the Government took a 40 million USD international loan to
build a large hydropower station in Taishir (Gobi-Altai).
Additionally, international investors constructed and oversee
a hydropower plant in Durgun (Khovd). With capacities of 11
and 12 megawatts (MW),respectively, the plants not only
dwarfed existing small scale hydropower plants but also held
the promise of energy even throughout the frigid winter.
They are meant to offset imports from Russia of diesel and
electricity through the Western Electricity System (WES).
The two plants were also registered in the Clean Development
Mechanism (CDM) to bring in funding through carbon emission
reduction (CER) purchases.

10. (SBU) However, there is concern that the two hydro plants
may never reach their potential due to insufficient and
seasonally irregular water flow. To date, renewable energy
efforts have faltered somewhat due to changing water flows.
Since construction of the hydropower plants commenced in
2004, the river flows upon which Taishir depend subsided
significantly. Durgun has only recently come online and is
providing electricity to the WES in quantities close to
expectations. Taishir is only providing 0.65 MW of the
expected 11 MW, which is routed to two sub-regions (soums).

T. Ganbold, Specialist for CDM Projects at the Energy
Authority stated it brought in less than 1,000 USD per month
through CERs. Of two once-planned additional hydropower
plants in the region, one at Maikhan-Tolgoi (Bayan-Ulgii) has
been canceled. Feasibility studies are complete for a
massive 69 MW plant in Erdeneburen (Khovd) though the
expected costs make construction unlikely in the near term.

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Interest in Nuclear Power
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11. (SBU) The GOM is also showing heightened interest in
nuclear energy. After international lobbying they obtained a
seat on the IAEA Board of Governors. Jargalsaikhan, First
Secrtary of the International Organizations Department of
the Ministry of Foreign Affairs and Trade (MFAT) and who is
instrumental in IAEA engagement, emphasized the importance of
maintaining the integrity of the Nuclear Non-Proliferation
Treaty for its assistance component. They hosted Director
General El Baradei as well as numerous technical specialists
from the IAEA earlier this year. In addition, the domestic
Nuclear Energy Agency (NEA) was given greater autonomy this
year as it was transferred to directly under the Prime
Minister's Office. Later moves by the NEA have raised
concerns of foreign investors that the government is
expropriating their investment interests in the uranium field.
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Diplomatic Initiatives and Goals
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12. (SBU) Mindful of his country's limited capacity to adapt
to climate change, former President Enkhbayar initiated the
Northeast Asian Summit on Climate Change. Participants
include representatives from North and South Korea, Japan,
China, and Russia. Their delegates assembled in Ulaanbaatar
for an October 2008 Expert Meeting, a March 2009 Director
Generals Meeting and a May 2009 Ministerial Meeting.
Originally the goal was to hold a Summit Level Meeting on the
sidelines of the UN General Assembly and release a
"Declaration of Cooperation on Climate Change in Northeast
Asia. " The draft of this document calls for creating an
integrated regional water management system, combating land
degradation and its derivative airborne yellow dust, as well
as developing and sharing technologies for conservation and
renewable or nuclear energy.

13. (C) Japanese reluctance put summit plans on hold.
Batbold, Director of the International Cooperation Department
at the MNET, speculated that Japanese reluctance may
originate from the idea of high-level public cooperation with
the DPRK. Jargalsaikhan attributed this to the transition of
power in Tokyo. For their part, Japanese officials stated
only that they would continue to engage in the regional
process following the Copenhagen Summit.

14. (SBU) The Director of MFAT's Policy Planning Department,
Batjargal, stated that President Elbegdorj was likely to
attend the December Summit in Copenhagen. He stated that as
a developing country, Mongolia would ultimately align itself
with the G-77. However, Dagvadorj, who will join the
Copenhagen delegation, stated that he felt a tension with
certain G-77 objectives. In particular, one proposal for
financing the adaptation fund is to require countries to
donate to it in proportion to their per capita emissions.
Mongolia would suffer from such a formula. Batbold stated
that developed countries should finance adaptation and
mitigation in proportion to past emissions.
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DPRK Involvement and Conservation
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15. (C) Director General of MNET's Information, Monitoring
and Evaluation Department D. Dagvadorj stated that the DPRK,
China and South Korea showed the most commitment at the
Mongolian-hosted conferences. The Russians only sent
officials from their local Embassy. Dagvadorj explained the
strikingly keen North Korean interest as being a product of
their domestic environmental problems including the retreat
of their own forests and the melting of interior permafrost.
Although referencing DPRK's Juche ideology of self-reliance
in his remarks, DPRK Minister of Land and Environmental
Protection Pak Song Nam devoted his speech to a call for
regional and international cooperation and expressed concern
for restoring "degraded land, coasts, water resources and
biodiversity."

16. (C) Batbold reported that the North Koreans suggested in
private that their laborers could be of use in context with
ongoing Mongolian and international efforts to plant trees in
semi-desert regions. Officials are currently considering the
proposal. Though DPRK officials made the suggestion, they
asked Mongolia to make a formal public request for such
labor. Dagvadorj believes such an interest in tree planting
may originate from DPRK concerns about their own struggles
with deforestation.

17. (C) Head of the Forest Agency M. Tungalag stated that she
would meet with the resident North Korean Ambassador in the
week beginning November 30. Displeased with the capabilities
of her own forestry staff and the results of their planting
efforts to date, she is eager to employ workers fit for the
task. She foresees drafting an MOU to hire 20-30 specialized
laborers from the DPRK and anticipates employing them outside
of the South Korean-run Greenbelt reforestation project in
the Gobi region. If all goes well she intends to hire more
DPRK laborers in the future. Currently the Forest Agency is
conducting planting projects in the Northern regions, and
their budget has doubled in the last year to over 2.5 million
USD. DPRK laborer wages and living expenses would be paid
for out of this expanded budget. The Northeast Asia
Association of Mongolia (NAAM) is working to facilitate this
arrangement. (NOTE: The NAAM is a private research
institution with strong unofficial ties to the DPRK. It is
run by former MP Baabar and counts such prominent figures as
Defense Minister Lu. Bold and MP R. Badamdamdin among its
members. END NOTE)
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COMMENT
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18. (SBU) Mongolia's high carbon dependence is unusual for a
developing country, which normally have a low carbon output
per capita. Sensitive to this, Mongolians are eager to cut
emissions relative to other developing nations. Yet although
the government is willing, their technical capacity is
lacking and parliamentary support for long-term, expensive
climate change efforts remains untested. Technical
shortcomings, for example, are evident both in the
Mongolian-run Taishir hydropower plant as well as the
forestry initiatives in the north.

19. (SBU) Given the strong commitment at both the high and
working levels of the Mongolian government to mitigation
efforts, U.S. public and private engagement with Mongolia in
carbon emission mitigation may serve as a productive model
for partnership with other developing nations in the
aftermath of a new compact on climate change. In addition,
Mongolia's population of nearly three million and abundance
of wind, sunlight and rivers allows for significant return
from small, well-placed investments. Because costs to both
donors and the GOM would be relatively small to build
technical capacity, the GOM would be keenly interested to
assume complete project ownership. In addition they could
leverage such investments to draw in greater financial
support through regional ties.

20. (C) Finally, Mongolia appears to view increased domestic
capacity to tackle energy and conservation issues as a path
to greater energy independence. For example, former DCM at
the Mongolian Embassy in Washington and current MFAT Americas
Director Odonjil has noted to us on a number of occasions
that Mongolia is heavily beholden to Russia commercially and

diplomatically as a result of energy dependence. END COMMENT
ADDLETON