05.07.2016 · Category: Policy Support Components, Regional Policy Support Component Mongolia

UNEP SWITCH-Asia Resource Use Indicator Database is guiding policy in Mongolia

When SWITCH-Asia’s resource use database was launched in 2015, one specific statistic stood out: Mongolia has the lowest rate of resource efficiency in the Asia Pacific region, needing 17kg of natural resources per dollar compared to the regional average of 3kg. When former Minister of Environment, Ms. Oyun Sanjaasuren saw this statistic, she requested that UNEP, as SWITCH-Asia’s Regional Policy Support Component investigate the status of natural resource use in Mongolia and determine what can be done to improve this statistic. With high aspirations for prosperity and an economy that depends on resource intensive livestock and mining sectors, it is critical for Mongolia to strengthen its policy framework and monitoring capacity for resource efficiency and SCP.  

Two workshops were held in May 2016 in order strengthen monitoring of key policies that outline a vision for the use of natural resources for production, consumption and export.   The first workshop reviewed the policy frameworks relevant to SCP, whereas the second workshop was more technical, and delved into the statistics that are needed to monitor resource use.

The week started with the scene-setting policy workshop entitled ‘Sustainable Development Goals And Natural Resource Related Indicators’ on the 23 of May 2016, hosted by Mongolia’s Ministry of Environment, Green Development and Tourism, together with the National Registration and Statistics Office.   Speakers came from a wide range of stakeholders involved in natural resource use:  Mongolia’s Ministry of Environment, Green Development and Tourism, Ministry of Finance, Ministry of Mining, Ministry of Industry, Ministry of Energy, Ministry of Food and Agriculture, Ministry of Labour, Ministry of Population Development and Social Protection, National Registration and Statistics Office, 
UNEP, UNDP, the Global Green Growth Institute, CSIRO, and the Economic Policy and Competitiveness Research Center

Two key policy documents give insights into the future development goals of Mongolia.  The Sustainable Development Vision (SDV) provides a cohesive macro-economic and a detailed sectoral vision, whereas the National Green Development Policy and Action Plan links policy visions to specific objectives and activities that include many dimensions of SCP.  Presentations from the various Ministries also gave insights into Mongolia’s SDGs planning, as well as sectoral energy, mining, agriculture and other policies.  

At the macro level, the National Green Development Policy’s first strategic objective is to “Promote resource efficient, low greenhouse gas emission and waste less production and services”.  This is in line with the principles outlined under the Sustainable Development Visions, which include “Use resources efficiently and effectively”, “Support clean technology and encourage low waste and sustainable production and consumption” and “Encourage environment-friendly attitude and appropriate behavior”. 

At the sector level, the Sustainable Development Vision (SDV) outlines policy goals characterized by natural resource value addition, reducing dependence on imports and order of magnitude increases in resource use – an expected and reasonable ambition for a country at an early stage of economic development and infrastructure investment.  For example, the tourism sector should grow from 0.2 to 2 million tourists – which, if not distributed over the off-peak season, will imply a ten-fold increase in hotel and transport capacity.  In the industrial sector, the SDV outlines a plan to expand leather processing, develop industries for smelting copper and purifying gold, domestically processing petroleum, natural gas, oil shale and coal, and starting to manufacture chemical fertilizers and other chemicals.  Other key elements include a shift to renewable energy, the addition of 2,800km of new roads, and large scale urban development.   The National Green Development Policy complements this vision with objectives for sustainable tourism, sustainable manufacturing and green urbanization.     

Participants discussed the types of information policy makers would need to monitor resource use at the sector and macro level, to ensure balance between growth and sustainability.   The initial results from the SWITCH-Asia database of Indicators for a Resource Efficient Asia-Pacific were reviewed to see what the current data could reveal.  Three main points emerged:

1. Mongolia is currently consuming a large quantity of materials on a per capita (34 tonnes/capita/year) and per dollar (17kg/$) basis.  On a per capita basis, it is 3 times the regional average.  This has not translated to high levels of HDI yet.  Why that is, is not clear yet, but is most likely because much of the material consumption is directed to investments and exports that have not yet generated socio-economic benefits at scale.  The high per capita consumption also relates to the choice of materials in which the economy specializes – namely animal products and primary coal and metal ores.  A 2010 report from the International Resource Panel has stated that coal and meat are the most environmentally and resource intensive materials and should be prioritized by environmental policy makers. 

2. The material footprint (16 tonnes per capita) is half the amount of resource use, which measures the amount of resource use needed for consumption within Mongolia and excludes pre-cursers to exported products, is much lower.  This can be attributed to the amount of material use needed (48 million tonnes) just to produce exports (5 million tonnes). 

3. While the income from extractive industries can provide much needed income for development, the earlier options for moving up value adding chains are considered, the better.  Physical, social and institutional infrastructure appropriate for primary industries will be different to that required by secondary and tertiary sectors.  If this was achieved, the Mongolian Government’s budget would be less vulnerable to price fluctuations on global commodity markets.  It will be very important to pay attention to governance issues directed at maximizing the benefits of the resultant income for the society as a whole. Major extractive industries in the modern setting tend to be very capital intensive and based on automation, providing only limited direct employment opportunities, usually for highly skilled workers.

Overall agreement was reached on the need to measure resource use and the socio-economic benefits generated.  Material flow data will help to ensure that the numbers are correct, identify the larger flows and help track resource use going forward. The UNEP SWITCH-Asia Resource Use Indicator Database could be used to track the resource efficiency dimensions of these policies.  This gives a clearer mandate to the National Registration and Statistics Office regarding the integration of Natural Resource Use Indicators in their portfolios. 

During the workshop, views were exchanged on which indicators could be included at the macro level.  Initially the only resource use indicator proposed for Mongolia’s Sustainable Development Vision was ‘extraction of minerals’; but this proposal has now been widened to include resource intensity (tonnes per dollar) and Material Footprint per capita. Mongolia is particularly well placed to benefit from resource use data: “Mongolia’s economic visions for prosperity are inextricably interlinked with its wealth of natural resources.  By following international standards to monitor natural resource use, Mongolia will be able to pursue evidence-based policy implementation, keeping sector level ambitions in line with macroeconomic visions for economic development and environmental sustainability” explains UNEP Programme Officer, Ms. Janet Salem.

This agreement set the scene for the second workshop hosted by the National Registration and Statistics Office: ‘Training on Physical Flow Accounts In Mongolia’ from the 24-25 May 2016. UNEP, as SWITCH-Asia’s Regional Policy Support Component, provided both financial and technical support. The ‘Training on Physical Flow Accounts In Mongolia ‘ examined the more technical aspects of resource use data with Jim West, CSIRO’s lead expert on Natural Resource Statistics (also known as Physical Flow Accounts) working side by side with the National Registration and Statistics Office (NSRO) lead expert,  J.Terbish.  The capacity of the NRSO to collect this data will determine the extent of monitoring of Mongolia’s Sustainable Development Vision. 

At present, the National Registration and Statistics Office has the capacity to incorporate core parts of UNEP SWITCH-Asia’s resource use indicator framework.  The direct Resource Use Indicators are needed to calculate “Domestic Material Consumption” (DMC), which is an indicator for SDG 8.4 on “resource efficient growth” and 12.2 on “sustainable and efficiency management of natural resources”.  All areas of material consumption were assessed – biomass, metal ores, minerals and fossil fuels.   Biomass and metal ores demanded particular focus because they are vitally important to Mongolia, and the most complicated in nature.  Although DMC is one number – in Mongolia’s case 100,000,000 tons per year, 34 tons per capita or 17kg/dollar of GDP—there are thousands of numbers behind a DMC, which can in turn be used to monitor natural resource use in sectoral level policies. 

The NRSO has now initiated their work in Natural Resource Statistics and will scale up application of the international guidelines in July.