45145-001: Establishment of Climate-Resilient Rural Livelihoods

Initial Environmental Examination Project Number: 45145 December 2011 MON: Proposed Grant Assistance for Establishment of Climate-Resilient Rural Livelihoods (Financed by the Japan Fund for Poverty Reduction) Prepared by the Government of Mongolia for the Asian Development Bank. The initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website. Initial Environmental Examination Establishment of Climate-Resilient Rural Livelihoods Prepared by the Government of Mongolia December 2011 CURRENCY EQUIVALENTS (as of 13 December 2011) Currency Unit – togrog (MNT) MNT1.00 = $0.00073 $1.00 = MNT1,379.00 ABBREVIATIONS ADB – Asian Development Bank EIA – environmental impact assessment EMP – environmental management plan HGO – herder group organization IEE – initial environmental examination JFPR – Japan Fund for Poverty Reduction MNET – Ministry of Nature, Environment and Tourism MOFALI – Ministry of Food, Agriculture and Light Industry PIU – project implementation unit PMU – project management unit SME – small and medium enterprise UNFCCC – United Nations Framework Convention for Climate Change WEIGHTS AND MEASURES ha – hectare km2 – square kilometer l – liter GLOSSARY aimag – province bagh – subdistrict soum – district NOTES (i) The fiscal year (FY) of the Government of Mongolia and its agencies ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2011 ends on 31 December 2011. (ii) In this report, “$” refers to US dollars. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS I. EXECUTIVE SUMMARY 5 II. INTRODUCTION 7 III. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 8 IV. DESCRIPTION OF THE PROJECT 10 V. DESCRIPTION OF THE ENVIRONMENT 15 VI. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 19 VII. INFORMATION DISCLOSURE, CONSULTATION AND PARTICIPATION 22 VIII. GRIEVANCE REDRESS MECHANISM 22 IX. ENVIRONMENTAL MANAGEMENT PLAN 23 X. CONCLUSION AND RECOMMENDATIONS 23 Appendixes: Appendix A: Environmental Baseline Data Appendix B: Environmental Management Plan Appendix C: Verification Form I. EXECUTIVE SUMMARY 1. The proposed Japan Fund for Poverty Reduction (JFPR) grant assistance for Establishment of Climate-Resilient Rural Livelihoods (the project) in Mongolia by the Ministry of Agriculture, Livestock and Light Industry (MOFALI) will improve the ability of the herder population in three soums (districts), namely Buutsagaan, Dzag, and Khureemaral, of Bayanhongor aimag (province, Figure 1), especially its poorer segments, to cope with threats to their livelihoods caused by resource-, management- and climate-related factors. The project is conceived to improve livelihoods and environment. The latter will be achieved via a more balanced use of existing pasturelands, reduced overgrazing, enhanced carbon sequestration by better-managed grasslands and introduction of certain renewable energy technologies into project soums. The total estimated cost of the project is $2.86 million. 2. The project has four components. Under the component A, herders will be organized into herder groups that will enter into pasture and water use agreements with soum governments for sustainable management of public range and water resources. The component will also seek to improve the herders’ ability to face risks associated with herding in Mongolia. Climate change adds to these risks and the project therefore is a form of building climate-resilience into rural livelihoods. The component B aims to restore and improve the functioning of water points in the targeted soums to achieve a wider pastureland suitable for grazing. Different types of water points will be rehabilitated or newly constructed with an emphasis on cost efficiency, cost-sharing with herder groups and sustainability. The alternative livelihoods component (component C) will widen the range of income-earning opportunities and will further strengthen the coping ability of local people. The component D provides for the usual range of project management and related activities. 3. The project has been classified as Category B for environment in line with ADB’s Safeguard Policy Statement (SPS, 2009). An environmental impact assessment has been conducted and an initial environmental examination (IEE) report has been prepared by MOFALI, the executing agency for the project. The project has been assessed for potential environmental impacts, which shows that it will provide significant environmental benefits, including (i) improved pasture management and reduced pasture degradation, and (ii) introduction of renewable energy technologies. Under the Mongolia environmental impact assessment (EIA) regulatory framework, no further environmental assessment other than a brief environmental screening is required for the expected project activities. 4. The adverse environmental impacts include (i) potential risks created during the construction and/or rehabilitation of water points (contamination of water sources, disposal of construction waste, etc.); (ii) potential impact of water point expansion on groundwater recharge and possibility of groundwater depletion; and (iii) generation and disposal of waste associated with expected expansion of certain non-herding income generation activities. Mitigation measures include (i) adequate hydrological surveys and water balance studies accompanying any deep well rehabilitation and construction activities assuring that no depletion of water sources by project activities is likely; (ii) surveys of all other water points or water infrastructure considered for rehabilitation validating the non-depleting nature of the measures proposed; (iii) working protocols imposed on construction and installation of contractors ensuring that no contamination of groundwater or surface water can take place, and that construction sites and their surroundings are restored to their original state; and (iv) preparation of waste management plans, to be agreed with respective soum authorities, which will provide for improved management of existing and any additional streams of waste generated by the project activities. 5 Figure 1: Physical Map of the Bayanhongor aimag 5. An environment management plan (EMP) has been developed. EMP specifies the executing agency’s responsibility to (i) make the project management unit (PMU) and the project implementation unit (PIU) responsible for to undertake environmental verification of well construction and/or rehabilitation under the component B and income generating activities under the component C in cooperation with the soum environmental inspectors; (ii) provide for submission of environmental verification documentation to the aimag environment officer for approval; (iii) stipulate monitoring of environmental compliance by aimag authorities; (iv) provide for disclosure of environment-related project information by aimag authorities; and (v) contain an environmental grievance procedure for the households of the project soums. The environment management plan 6 has been discussed with, and supported by, the environment officer of Bayanhongor aimag government, Ministry of Nature, Environment and Tourism (MNET), and the MOFALI, the executing agency of the project. 6. This assessment (initial environmental examination) finds that there will be no environmental impacts requiring mitigation steps beyond the management measures built into the EMP. A full environmental impact assessment under ADB’s SPS is not considered necessary. II. INTRODUCTION 7. Herding in Mongolia depends heavily on pasture lands throughout the year. Pasture degradation has been a threat to herding, the dominant means of livelihoods in rural Mongolia. Increasingly erratic climates hamper the growth of pasture and consequently cause significant losses of livestock during winter and spring. The dzud during 2009–2010 killed about 9.7 million livestock, about one-fourth of the national herd, and took away the means of livelihoods from a large number of herder households. This unprecedented disaster should not be simply regarded as the impact of the climate, but as a consequence of inadequate livestock and pasture management. 8. The poor livestock and pasture management largely stems from the open access to pasture lands, which replaced the regulated access to pasture lands in the early 1990s. Since the transition from the socialist regime, the open access facilitated the unemployed to be absorbed by the herding sector. However, it resulted in the increased number of herders and herd size to unprecedented levels, which is at the cost of progressive pasture degradation. The number of herder families increased from 75,000 in 1991 to 170,142 in 2009. During the same period, the national herd significantly increased from 24.7 million to 44.0 million, which mainly resulted from the increase of small livestock (i.e., goats and sheep). The number of goats increased by 300% (from 5.0 million to 19.7 million), and sheep increased by 35% (from 14.3 million to 19.3 million).1 The major cause of the expansion of goats was the high cashmere prices. 9. While the livestock count keeps

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