Transformative Solutions and Green Finance in the People’s Republic of China and Mongolia

Abstract

Asia has experienced widespread transformation and growth, accompanied by increased demographic pressure, greater intensification of agricultural production, industrialization, and urbanization. This economic growth has been very resource- and carbon-intensive, while climate change has triggered or exacerbated behaviors and defense mechanisms that have come at the expense of the natural environment. Therefore, we examine and compare three Asian Development Bank (ADB) projects in two member countries of the Central Asia Regional Economic Cooperation: one in the People’s Republic of China (PRC) and two in Mongolia that relate to sustainable green development and use innovative financial mechanisms, and behavior-changing nudges. We provide comparative analyses and aim to demonstrate effective, innovative, and sustainable green finance and green transformation approaches in these two countries to address these pressures. The ADB–PRC loan for the Anhui Huangshan Xin’an River Ecological Protection and Green Development project aims to help Huangshan municipality reduce water pollution in the Xin’an River Basin, which is part of the Yangtze River Economic Belt. The project is piloting innovative green financing mechanisms to reduce rural pollution and complement the ongoing interprovincial eco-compensation scheme while supporting green agroecological businesses through two interventions: the Green Investment Fund and the Green Incentive Mechanism. In Mongolia, ADB and the Government of Mongolia have developed two large-scale transformative projects using integrated design and innovative green financing mechanisms to leverage private sector investment: (i) Aimags and Soums Green Regional Development Investment Program, which aims to promote green urban–rural linkages, green agribusiness development, natural capital, rangeland regeneration, and soil carbon sequestration through the (ii) Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Project, which aims to transform Ulaanbaatar’s vulnerable and substandard peri-urban areas into low-carbon, resilient eco-districts that provide access to green affordable housing.