Greener economy

How will a greener economy help Mongolian economy?


UNEP defines a green economy as one that results in “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities” (UNEP 2010). Generally a green economy is low-carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.

According to the UNEP, a green economy grows faster than a brown economy over time, while maintaining and restoring natural capital. A green economy has the potential to create additional jobs in the medium to long run and the greening of most economic sectors would reduce greenhouse gas emissions significantly.

There is an economic model which can show us how greener economy will help the economy. The Millennium Institute developed Threshold 21 model which uses system dynamics as its foundation and incorporates optimization, econometrics in the construction of the model, and simulations to illustrate possible alternatives futures.

The EPCRC published The Green Policy Assessment report 2017 which presents scenarios utilizing the Threshold 21 (T21) framework jointly developed by the Millennium Institute, the Mongolian Ministry of Finance and Ministry of Environment and Tourism to test effects of investment in a green economy in Mongolia.  The report suggests that in the long run, supporting green economic growth would offer a more sustainable path going forward. 

Download: The Green Policy Assessment report 2017

You can see growth, poverty and unemployment scenarios in thebelow charts. In this scenario, green economy means an economy where 4% of GDP invested for green development.

The modelling found that if 4% of GDP invested for green development:

  • employment will increase by 23% by 2030;
  • real GDP per capita will reach 3,1 million by 2030 (up from 2.1 million in 2014);[EBH1] 
  • the poverty rate will reach 10% by 2030 (down from 21.6% in 2014); and
  • Green-house gas emissions will be reduced by 46.6%.


 [EBH1]According to NSO, average GDP per capita is already MNT 7.9 million in 2016.

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