Economy-wide impacts of climate change and adaptation in Mongolia.

Großmann, A., Hohmann, F. & Reuschel, S. (2023): Economy-wide impacts of climate change and adaptation in Mongolia. Assessing the macroeconomic impacts of climate change and adaptation in Mongolia with the E3 prototype model. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Berlin.


Climate change seriously impacts Mongolia. This concerns not only the environment but also results in immense economic costs, affecting key industries and endangering jobs, wealth, and life of Mongolian people. Floods destroy infrastructures while dzuds cause crop and livestock losses in agriculture. Apart from theses direct impacts, further losses result from e.g., impaired production due to power outages. Adaptation aims at limiting adverse effects of climate change and at the same time tries to maximize its benefits. For certain economic sectors and climate hazards, a number of single economic sector evaluations and different cost-benefit analyses for adaptation measures exist. However, macroeconomic impacts and intersectoral effects of climate change and adaptation are rarely considered. For Mongolia’s economy, knowledge about economy-wide effects of climate change and sectoral adaptation measures is essential, especially with regards to employment, GDP, and CO2 emissions. Macroeconomic models such as the prototype model combined with scenario analysis are valuable tools to raise awareness of the topic and to support policy makers to develop climate resilient strategies. The Excel-based e3 (economy, energy, emission) prototype model builds upon country-specific data from international datasets for capacity building purposes. Data on Mongolia was used to put the prototype model into practice, creating the prototype model. The following report presents the exemplary macroeconomic assessments conducted for the impacts of dzuds and investments in irrigation systems to adapt against the impacts of dzuds. Macroeconomic analyses with e3 models are based on specific expert knowledge and / or detailed sector models, which were only available to a limited extent for scenario analyses with the prototype. The results are thus only of limited use for policy advice and rather serve demonstration purposes.