How Carbon Credits Can Reduce Ulaanbaatar’s Air Pollution

By Undariya Rinchin

In November 2022, the world had its eyes on COP27, the UN Climate Conference. This year, there was record-breaking heat across North America and Europe and a devastating flood in South Asia. Yale Climate Connections reported that weather disasters will cost the world $29 billion in 2022. As we grow more conscious of climate change as a planet, many individuals, organizations and governments worldwide have begun observing their carbon footprint with a keen eye.

Net zero once seemed impossible. Yet, a glimmer of hope appeared in the recent past with the emergence of carbon credits – units of carbon emission reductions measured in the metric tonne that are verifiable and tradeable.

Bloomberg predicts that the price of carbon credits may rise by 3,000 percent by 2029 with better regulations.

The ever increasing demand for carbon credits could be the straw that stirs the milkshake for climate innovation in Mongolia and possibly resolves the air pollution problem in Ulaanbaatar.

While Ulaanbaatar’s air pollution this winter is taking an increasingly heavy toll, it has become a less pronounced issue because of other prominent problems like corruption and traffic jams in the city.

Photo of Ulaanbaatar’s air pollution

To that effect, a Mongolian-Singaporean climate-focused tech start-up called URECA is taking a bold and revolutionary approach.

In November 2022, URECA broke international news by raising $1.5 million. The company founded by Mongolian climate advocates only a year ago won the Best Climate-Tech Start-Up Company award from Singapore Business Awards. With the added funding, the company is set to begin its climate-tech innovation while aiming to expand to Southeast Asia.
Purchasing one carbon credit from URECA equals removing one tonne of CO2 from the atmosphere, taking 36 hybrid cars off the road for a month, and planting and maintaining 100 trees for a year.

According to URECA, the company is aspiring to fill the gap in existing standards for small renewable energy producers like households through its innovative technology, which ensures that the verified carbon credits listed on its marketplace are of high quality and meet the most stringent requirements.

URECA’s vision is to make a global platform where people can trade high-quality carbon credits sourced from sustainable practices in climate-affected households in Mongolia.

The project’s digital MRV (measurement, reporting, and verification) technology is blockchain-based, making the carbon credits tried and true.

The technology was developed in partnership with the Mongolian University of Science and Technology. The tamper-proof credentials of the MRV through blockchain are a highly significant factor as they prevent double-counting.

Five households in the ger districts of Ulaanbaatar and rural Mongolia have been screened and selected as beneficiaries of the URECA’s first round of carbon credit collection. High-quality solar panels (1.5kW- 5kW), electric heating, and ger insulation were installed. One carbon credit is priced at $80 (December 2022). Soon, the selected households will be able to profit from selling the carbon credits that URECA’s MRV recorded.

The project aims to allow individual renewable energy producers in LEDCs to benefit from carbon credits. Nearly all carbon credit incentive programs have high upfront costs and excessive paperwork requirements for the MRV.

Additional benefits to the households include a 70 percent reduction in energy costs. A study by URECA found that ger district households burn around 10-20 tonnes of coal annually, generating 14-20 tons of CO2.

Solving Ulaanbaatar’s air pollution is an age-old question that has been circulating for over three decades.

Through URECA’s innovation and international partnerships, UB’s air could become clean one day.

Undariya Rinchin is an Ulaanbaatar-based journalist.