ADB, Mongolia Launch Grassland Carbon Pilot to Restore Rangelands, Cut Emissions

This inter-ministerial collaboration will help ensure the pilot is aligned with Mongolia’s national priorities on climate action, sustainable land management, rural development and biodiversity protection.

The Asian Development Bank (ADB) and the Government of Mongolia have launched a pioneering Grassland Carbon Restoration Project, a pilot initiative designed to restore degraded rangelands, strengthen climate resilience and open the door for Mongolia to participate more fully in international carbon markets.

This first-of-its-kind project in Mongolia will test how improved grassland and livestock management can generate certified carbon credits, creating a sustainable source of financing to support the long-term health of the country’s vast steppe ecosystems—an essential foundation of Mongolia’s culture, biodiversity and rural economy.

A New Model for Grassland Restoration and Climate Adaptation

The pilot project aims to demonstrate how carbon finance can be leveraged to reverse decades of land degradation, help control desertification, and improve the resilience of herder communities facing extreme weather linked to climate change.

“Mongolia’s vast grasslands are central to the country’s heritage, economy, and ecological health, yet they are becoming more fragile due to climate change and overgrazing,” said ADB Country Director for Mongolia Shannon Cowlin. “This pilot is expected to show how climate and carbon finance can restore grasslands while supporting rural resilience. The lessons learned will help shape larger-scale carbon credit initiatives and strengthen Mongolia’s participation in global carbon markets.”

Quantifying Carbon Sequestration Through Better Herding Practices

Under the pilot, ADB will work closely with the Government of Mongolia and local herding communities to:

• Quantify the carbon sequestration potential of improved grazing practices

• Test standardized methodologies for measuring soil organic carbon in grassland ecosystems

• Develop a robust monitoring, reporting and verification (MRV) system aligned with international carbon crediting standards

• Explore opportunities for private sector involvement

• Create benefit-sharing mechanisms ensuring rural herders gain from carbon revenues

These components together will create a model that can be scaled nationally, generating stable income for communities while restoring ecosystems critical for biodiversity, climate adaptation, and rural livelihoods.

Government Collaboration Across Multiple Ministries

The project is being implemented in close partnership with:

• The Ministry of Food, Agriculture and Light Industry

• The Ministry of Environment and Climate Change

• The Ministry of Economy and Development

This inter-ministerial collaboration will help ensure the pilot is aligned with Mongolia’s national priorities on climate action, sustainable land management, rural development and biodiversity protection.

Supporting Mongolia’s Role in International Carbon Markets

The initiative is also preparing Mongolia to participate effectively in carbon markets under Article 6 of the Paris Agreement, which allows countries to trade carbon credits generated from verified emission reductions or removals.

Insights from the pilot will support the drafting and implementation of Mongolia’s forthcoming Climate Change Law, which will regulate how carbon credits are issued, tracked and traded in the country. By establishing clear rules early, Mongolia can position itself as a competitive participant in global carbon markets while strengthening environmental safeguards.

Enhancing Livelihoods and Protecting a National Treasure

Mongolia’s grasslands—covering more than 70% of the country—are a cornerstone of traditional pastoral life. But they are increasingly threatened by overgrazing, desertification and climate-driven shocks such as severe winter “dzud” events.

By improving land management and tapping into carbon markets, the project seeks not only to restore ecosystems but also to diversify rural livelihoods, reduce vulnerability, and promote sustainable herding practices for future generations.

This innovative partnership stands to offer a transformative model for other countries with large grassland ecosystems seeking climate-smart solutions rooted in both science and community-driven action.