Mongolia’s bid to go green presents big test
The community of economies going green in a hurry has the unlikeliest of new members: coal-addicted Mongolia. Can the country shed its past?
Mongolia’s president Ukhnaa Khurelsukh turned heads at the United Nations in September 2021 with a seemingly fantastical pledge: His nation would “fight against climate change with achievements of the modern science and technology, as well as best practices and the traditional experiences” of Mongolia’s “nomadic civilization”.
To prove it was no publicity stunt, Khurelsukh turned up in Glasgow two months later for the UN Climate Change Conference, or COP26. There, he told the world that Mongolia was raising its target to reduce greenhouse gas emissions to 22.7% by 2030. Even better, Khurelsukh said, odds are high that Ulaanbaatar can nudge that commitment up to 27.2%.
It was music to the ears of long-time Mongolia investors.
“In its quest to establish its green credentials, Mongolia could and should attract international sustainable finance,” says Alisher Djumanov, founder of boutique investment bank Silk Capital and a veteran emerging markets investor.
“For the last two decades, China has overshadowed other developing countries as a massive magnet for foreign investments, crowding out smaller economies like Mongolia,” he says. “Now with global investors increasingly viewing China as less investable, Mongolia should strongly compete for reallocation of investment flows.”
Now comes the hard part. Embracing the UN’s Sustainable Development Goals in the long run will take considerable political will because of the economic costs for Mongolia.