Khurelbaatar Undarmaa*, Takeshi Mizunoya Graduate School Of Life And Environmental Sciences

1. A Study on Utilizing International Market Mechanisms to Mitigate Green House Gas Emissions: A Case Study On Energy Sector ofMongolia Khurelbaatar Undarmaa*, Takeshi Mizunoya GraduateSchoolOf Life And Environmental Sciences JDS International Seminar, Tsukuba, Japan January 22nd2019 1

2. Contents • Background • Literaturereview • Objectives • Methodology • Current situationanalysis • Expected results 2

3. Background Area: 1,564,000km2 Average altitude: 1,580 m above sealevel Population:3,177,899 Populationdensity: 280 per/km2 (capital city) Population distribution: 34% - Countryside 66% - Urbanarea GDP: 3,686 US dollar 34% 66% Photo source:www.gotavelingabroad.com 3

4. Background • Facts • Coal reserves: 173B.tons • Primary source of energy: coal • Total Inst. Capacity CHP90% • Landscapes andclimate: • diverseandsensitive toexternal factors RE6% • Resource dependenteconomy: • setbacks anddeclines Diesel2% Hydro2% 4

5. Background 4 3 2 1 0 28.50 44celcius degrees (July) y = 0.0295x -0.874 R² =0.4881 • Annual meanT • °↑2.24°C • /1940-2015, • comparedwith 1961-1990/ -1 -2 -3 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Climate change trend over Mongolia since 1940-2015 a. Annual mean temperature, degreeC -31 -55.30 celcius degrees (January) 50 y = -0.0957x +2.9616 40 R² = 0.0162 30 20 10 0 -10 -20 -30 -40 -50 • Annual precipitation • ↓7.3%/1940- • 2015, compared with1961-1990/ 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Climate change trend over Mongolia since 1940-2015 b. Annual precipitation amount,mm 5 Source:IMRHE

6. Literaturereview Climate change mitigation and marketmechanisms Basis for the international mechanisms to mitigate GHG emission such as JCM, CDMetc., Law onair revised (2012) Ministry ofNature Environment and tourism CCCO established Feb.2011 CDM National Bureau 6

7. Objectives • To study possibilities to reduce the GHG emissions from main sources and ways to use existing carbon mechanisms to reduce GHG emissions from energysector. • Potentials to reduce the GHG emission from the point and non- point sources form energy sector inMongolia • To detect the barriers of the mitigationmeasures • To detect potential market-based or other approaches to trade the emission reduction from the energy and othersectors • Futurebenefits 7

8. Significance • Basis of opportunities can be recognized to implement and improve the use of existing mitigation activities in energy sector by comparing the reduction approaches and technology improved scenarios using international financing mechanisms and othertools • Activities and measures can be detected by researches and studies but most importantly utilizing international funding and support to implement necessary activities are crucial to our country’s current economy • Research would be conducted particularly in use of international fund/mechanisms. 8

9. Methodology • For the research, literature review, desk review and estimations will be conducted using government related reports and policy documents.Accordingly, • Policy and action review among the existing international and national documents andstudies • Estimation of integrated social cost-benefit analysis to compare existing market-basedapproaches 9

10. Datacollection • Data will be covered from the official organizations such as national statistics agency and coordinating ministries andagencies. • Primary and secondary data of energysystem • (default values as well as socioeconomic data collected from the related organizations and specialists based on data survey or interview and project documents) • Specific data to be considered (mitigation projects’ information, emission reduction, traded credits amount, project costs andduration…) 10

11. Current situation analysis and overview of studyarea DOMESTIC INTERNATIONAL Mongoliaratified Laws: Renewable Energy Law(2007) Law on Air(2010) Law on Air Pollution Payment(2010) Law on Air Pollution Reduction of the Capital City(2011) UNFCCC in1993 Kyoto Protocol in 1999 Energy Charter Treaty and Protocol on Energy Efficiency and Related Environmental Aspects in1999 Paris Agreementin 2016 Long term sustainable developmentprograms: The Mongolian Action Program for the21st Century (MAP21) The MDG-based Comprehensive National Development Strategy ofMongolia Mid termprograms: National Action Program on Climate Change(2011) National Renewable Energy Program(2005) New Reconstruction Mid-term (development) Program(2010) 11

12. Current situation analysis and overview of studyarea Mongolia’stotalandnetGHGemissionsandremovals,1990-2014(GgCO2e),Mongolia'sNationalInventoryReport2017 • Total GHG emissions in Mongolia in 2014 were 34,482.73 Gg CO2e (excluding LULUCF). This represents a 57.09% increase from the 1990 level of 21,950.73 Gg CO2e and 5.49% increase from the 2013 level with 32,687.27 Gg CO2e. Net GHG emissions in 2014 were 10,030.80 Gg CO2e (including LULUCF). This represented a 1,034.44% increase from the 1990 level of -1,073.46 Gg CO2e and 23.23% increase from the 2013 level with 8,139.60 GgCO2e • Mongolia submitted its NDC to UNFCCC in September,2015 • The main mitigationgoal is to reduce GHG emission by14% in 2030 comparing to 2010. 12

13. Planning process and means ofimplementation • Many of the development and climate policiescover • periods up to 2016 and2020 • The measures outlined in this INDC have been introduced • as legislation and/or proposed in nationaldevelopment • strategies orplans • Green Climate Fund and to crediting mechanisms...

14. Current situation analysis and overview of studyarea Electricity of all grids inMongolia 6000 5000 GWH 4000 Importfrom Russia Otherfossil fuel 3000 Hydropower 2000 CHP Diesel 0.06% Wind 2.66% Import 19.6% 1000 Hydro 1.43% Solar 0.04% CHP 76.21 % 0 CenttralGrid WestenGrid EasternGrid Altai-Uliastai Grid 14

15. Current situation analysis and overviewof study area Emissions and mitigationpotential SUPPLYSIDE Electricity consumed by different sectors(2011) REDUCE LOSSES AND INCREASEEFFICIENCY THERE ARE GREAT POTENTIAL FOR REDUCING GHG EMISSIONS BY REDUCING LOSSES AND INCREASING ENERGY EFFICIENCY AND RENEWABLEENERGY DEMAND SIDE In Mongolia, heating season lasts 9 months in a year and thereis tremendous heat losses in buildings due to poorinsulation. Station internaluse (15.56%) Export(0.38%) Industryand construction (40.69%) Losses in transmissionand distribution (18.38%) Other(3.47%) Household and Communal housing(17.68%) Heat consumption of different types of dwellings(kWh/m2 800 700 600 500 400 300 200 100 0 800 600 400 200 0 area) Transportand communication (3.07%) Agriculture (0.78%) Internal use and distribution and transmission losses account for more than 30% of the total electricity produced by CombinedHeat and Power Plants (CHPs) in Mongolia. And there IS much room for reducing GHG emissions by reducing losses and increasing energy efficiency. Source: Ministry of Energy,Mongolia Apartments builtApartmentsbuilt Bad insulatedBetter BadinsulatedBetter after1997 ger insulatedgerhouse insulated before1997 house Source: UNDP Building energy efficiency project(BEEP) 15

16. New Market Mechanismdevelopment • With Cancun agreementits decided toconsidertheestablishmentofone or more market-based mechanisms (para 80) • Complementing other means of support for NAMAs by developingParties • Safeguarding environmentalintegrity • Ensuring a net decrease and/or avoidance of global GHGemissions • Assisting developed Parties to meet part of their mitigationtargets • Maintain and build upon existing mechanisms, including those established under theKP • Current Bilateral Cooperation on New MarketMechanism In 2013 MEGDT and MoEJsigned MoUon In 2011 MNET and MoEJ signed MoUon • Dec2011-2013 for 3years • 2013-2016 • 2016- expected to continueits cooperation • Framework of the MoU in 2011includes: • Mitigation and Adaptation on Climate Change; • Feasibility studies for Bilateral Offset Credit Mechanism; B) Capacity building on newmechanisms such asNAMA, MRVetc.;

17. Current situation analysis and overview of study area • CDM • Hydropowerplants • Salkhit wind farm50MW • Energy conservation technology incement industry • A Retrofit Programmefor decentralized heating stations • JCM • High Efficiency HeatOnly Boiler • Energy-savingtransmission lines in the MongolianGrid • 10 MW solar powerplant • 2.5 MW solar powerplant andetc. • 17 No ac pr Data source: CDM executive board & Ministry of Environment ofJapan

18. Expectedresults • Estimation and comparison of GHG mitigation potentials in energy sector • Study on compatible international market mechanisms to reduce the GHGemissions • Results on investment costneeds • Result on Co-benefits (air pollution reduction, environmental and human health improvement, livelihood .... poverty reduction,etc.) 18

19. References • Ministry of Nature, Environment and Tourism, Mongolia. 2014. Mongolia Assessment Report on ClimateChange. • Government of Mongolia. 2015. Intended Nationally Determined Contribution (INDC) Submission by Mongolia to the Ad-Hoc Working Group on the Durban Platform for Enhanced Action (ADP). Retrieved from http://www4.unfccc.int/submissions/INDC/Published%20Documents/Mongolia/1/150924_INDCs%20of%20Mongo lia.pdf • Government of Mongolia. 2016. Concepts of Mongolia’s Sustainable development 2030. Retrieved from http://www.mfa.gov.mn/ • Government of Mongolia. 2014. Green Development Policy ofMongolia • Ministry of Nature, Environment and Tourism, Mongolia. 2010. (MNET, NAPCC, 2010) National Action Plan for ClimateChange • Government of Japan and Mongolia. 2013. (Japan, 2013). Retrieved from www.jcm.go.jp,www.jcm-mongolia.com • Ministry of Nature, Environment and Tourism, Mongolia. 2011. (MNET, 2011). Retrieved from http://www.jcm- mongolia.com/wp-content/uploads/2015/11/20121219-Final-Carbon-Finance-in-Mongolia-ENG.pdf • Ministry of Environment and Tourism, Mongolia. 2017. Mongolia's National Inventory Report Annex to Initial Biennial Update Report toUNFCCC • United Nations Statistics Division,2016 • 19

20. THANK YOU FORYOUR ATTENTION! 20 Photo by Undarmaa Khurelbaatar2016