Opening speech by Ahmed M. Saeed, ADB Vice-President, Operations 2, at the Pre-COP26 Workshop on Greening Mongolia’s Development, 21 October 2021, Ulaanbaatar, Mongolia
Your Excellency, President Khurelsukh
Excellencies
Distinguished guests
Ladies and gentlemen,
ADB takes great pride in its role as Mongolia’s most significant multilateral and development partner. While we have always done our best in this capacity, we also know that the coming challenges of climate change and climate transition will be large, and that we must also continue to step up the quality and scale of our engagement.
Because of the importance of this subject, I am grateful for the opportunity to participate in this Pre-COP26 Workshop on Greening Mongolia’s Development.
In less than two weeks, the global community will gather to coalesce around a set of action sin order to collectively address the problem of climate change. Historically, this transition has been viewed as a burden – as a cost to be shared. That is the genesis of the $100 b promise made by the developed to the developing world. But I believe that addressing climate change is an opportunity for Mongolia and that – in coming years - we will discover that decarbonization is development.
Developing countries that seize the mantle and place themselves on the leading edge for decarbonization will be well positioned to benefit from large amounts of official and unofficial capital flows to support adaptation and mitigation, will establish a beachhead in the technologies and industries of the future and will have a competitive advantage in the fight for traditional FDI. Mongolia should be positioning itself to benefit from these trends, especially because of the risks posed to its largest export as the decarbonization process accelerates.
I want to commend Mongolia for its active role in the international dialogue on climate change, and its commitment to the objectives of the Paris Agreement. Congratulations, Excellency Mr. President, on your very ambitious one billion tree initiative, which can provide benefits for the country, the region, and the climate.
As a partner to Mongolia for the last 30 years and more than $3.5 billion in assistance provided in that time, ADB is ready to support Mongolia in building resilience in response to the very real climate and global economic shifts, both of which may be felt more acutely in Mongolia than elsewhere. Our newly approved Country Partnership Strategy reaffirms ADB’s commitment to helping Mongolia change its emissions trajectory and increase the country’s resilience, while continuing its economic development.
We are already strongly partnered with Mongolia to help catalyze transformational change in two of the areas to be discussed today: energy and rangeland management.
A vital part of Mongolia’s energy future will be the increased use of renewables. As it stands, most of Mongolia’s power and heating infrastructure is still based on domestic coal. But stronger climate ambitions will require reaching the inflection point in coal-based emissions as soon as possible. And Mongolians are keenly aware that the side effects of coal are not limited to increased greenhouse gases. Air pollution due to coal use and associated health consequences have reached crisis levels, coming at a high cost for the people of Mongolia. Thankfully, Mongolia is also endowed with vast renewable energy resources for wind and solar energy production—more than 2,600 Gigawatts of potential. This rich resource affords clean options for its energy and economic future, including a potential new export base for the country.
As I said earlier, I believe moving proactively and scale to seize these opportunities presents a valuable development path forward for Mongolia.
ADB is currently supporting a lower carbon energy trajectory in Mongolia through projects deploying battery energy storage to enable higher shares of renewable in the generation mix and heat pump demonstrations in public buildings. ADB is also supporting Mongolia to explore the export potential of its South Gobi renewable resources. We can build on this work to accelerate progress on both sustainable energy use and a strong economic future for the country.
Also, vitally important for Mongolia’s economy and climate action is ecosystem health. Rangelands cover 82% of the country, and the livestock sector represents around 25% of total employment and 10% of GDP. Climate change has already impacted rangeland productivity, affected glacier-fed water regimes, and has increased exposure of herders to climate-related natural disasters. This has severely impacted livestock productivity and quality, which were already significantly weakened by the collapse, since the 1990s, of the rural economy. Reversing the degradation and restoring the health of Mongolia's vast rangeland area offers a very large mitigation potential.
ADB is in the final stages of preparing a multi-phase loan project that will support sustainable rangeland management and fodder production and establish rural agricultural processing hubs through small and medium enterprises.
But the remaining needs are immense.
We have increased our ambition for climate financing to $100 billion from 2019 to 2030 for the Asia and Pacific region and will continue to work with countries like Mongolia to mobilize higher levels of concessional climate finance.
But beyond the direct financial support, we see our key role as one as leveraging and crowding in knowledge and financing from other partners. With this approach we use our own tools, drive high impact collaboration with existing development partners, and bring in new actors to collectively address the climate challenge. To this end, we are preparing to establish a commercial sustainable debt financing platform with commercial banks and to set up an innovation fund with philanthropic partners.
We have been working closely with the Governments of Indonesia and the Philippines on a new initiative, the Energy Transition Mechanism. ETM is a blended finance solution that leverages its lower cost of capital from concessionary funds into a reduced working life for coal-fired power plants in target countries. We view this as a locally tailored, replicable, scalable, market-based and fair mechanism for accelerating carbon transition.
Going forward, we will look to identify other locally tailored solutions that address countries’ unique needs, including in Mongolia, where there is opportunity to introduce groundbreaking change instead of the lock-in of what could become stranded assets.
Let me conclude by repeating ADB President Masa’s words when he says, “The battle against climate change will be won or lost in Asia and the Pacific.” It is incumbent on all of us to put our collective energies to winning this battle. It is not enough to simply be a “good actor.” The only thing that will matter for future generations is whether we collectively succeeded or failed.
Let me thank you again, Excellency Mr. President, for initiating this dialogue. We are pleased to be your partner in this effort.