At the 17th session of the Conference of the Parties to the United Nations Convention to Combat Desertification (UNCCD COP17) in Ulaanbaatar, Mongolia, a side event on China-Mongolia desertification control cooperation and ecological restoration was held on August 18.
Ji Lin, Senior Climate Change Officer at the Asian Development Bank's Resident Mission in China, highlighted that ADB is utilizing market-based financial instruments and carbon market mechanisms to support sustainable grassland management in Mongolia. She expressed optimism about the potential for China-Mongolia collaboration in policy, technology, and carbon markets.
ADB, a regional development bank comprising 69 member countries, has long focused on Mongolia's sustainable development. Mongolia possesses some of the world's largest grassland resources, which are crucial to its people, with over one-third of the population relying on grasslands and livestock farming. However, grassland ecosystems face mounting pressure from climate change and human activities, with more than 70% of high-quality pastures already showing varying degrees of degradation. Meanwhile, Mongolia's grasslands hold significant carbon sink potential, estimated at approximately 440 million tonnes of CO2 equivalent.
ADB has identified market-based financial tools as a key focus to address grassland restoration and carbon sink potential. Ji Lin shared two project examples. First, ADB is collaborating with local financial institutions in Mongolia to provide a $100 million loan supporting small and medium-sized enterprises, micro-businesses, and herder communities in developing sustainable green agriculture. This initiative aims to enhance productivity while promoting resilient livelihoods, livestock management, and grassland restoration. Second, ADB is working with Mongolia's largest cashmere enterprise on a sustainability-linked loan to improve its sustainable development and ESG performance. This partnership includes technical assistance to help the company provide extension services to frontline herders and encourage direct procurement from herder communities, using market-based incentives to promote sustainable grazing and production practices.
Regarding carbon market mechanisms, ADB is supporting Mongolia in implementing climate change-related laws and advancing international carbon credit trading under Article 6 of the Paris Agreement. By generating carbon credits through grassland protection policies and technologies, herder communities can earn additional income while preserving grasslands.
On China-Mongolia cooperation and knowledge sharing, Ji Lin noted that under the Regional Knowledge Sharing Initiative (RKSI), ADB and China's Ministry of Finance organized a high-level Mongolian delegation visit to China. During the visit, the delegation exchanged insights with Chinese departments responsible for natural resources, grasslands, and forestry, as well as relevant enterprises, and observed seed technologies and grassland restoration techniques. She emphasized that China offers valuable experience in grassland restoration, including policy formulation and planning, social capital participation, technological innovation, monitoring and evaluation methods, and performance-based payment mechanisms.
Ji Lin concluded that the future holds broad prospects for China-Mongolia collaboration in grassland protection, green finance, and carbon markets. ADB is ready to continue serving as a platform to promote policy experience sharing, technical exchanges, and the application of market-based mechanisms.