VZCZCXYZ0000
PP RUEHWEB

DE RUEHUM #0349/01 3350343
ZNY CCCCC ZZH
P 010343Z DEC 09 ZDK
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC PRIORITY 3139
INFO RUEHBJ/AMEMBASSY BEIJING 6560
RUEHMO/AMEMBASSY MOSCOW 2656
RUEHUL/AMEMBASSY SEOUL 3843
RUEHKO/AMEMBASSY TOKYO 3489
RHMFISS/HQ EPA WASHINGTON DC 0064
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

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 
--------------------------- 
Environmental Vulnerability 
--------------------------- 
¶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. 
---------------------- 
Economic Vulnerability 
---------------------- 
¶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. 
---------------- 
Carbon Emissions 
---------------- 
¶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. 
---------------------------- 
Renewable Energy Initiatives 
---------------------------- 
¶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. 
 
------------------------- 
Interest in Nuclear Power 
------------------------- 
¶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. 
-------------------------------- 
Diplomatic Initiatives and Goals 
-------------------------------- 
¶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. 
--------------------------------- 
DPRK Involvement and Conservation 
--------------------------------- 
¶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 
------- 
¶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