Capacity Building Program on the Economics of Climate change adaptation 2 nd Regional training, Bangkok, Thailand 1 st October 2013 MONGOLIA: Cost Benefit Analysis (CBA) Project selection

Team members present at the training:

Ms.Tsendsuren Batsuuri,

Ministry of Environment and Green Development

, Ms.Erdenetsetseg Baasandai,

Institute of Meteorology, Hydrology and Environment

Ms. Munkhtsetseg Zorigt,

Mongolian National University

Case 1: Overview of Selected Project for Agriculture

Project Name:

Introducing water-efficient irrigation technology (for farmers who grow seabucktorn and blueberries ) in Kharkhiraa river basin in Uvs province

Alternative scenario: (1)

continue with current practice

Case 1: Current situation

Canal irrigation system Current irrigation practice

Surface/ flood irrigation is widely used in the target region with water coming from irrigation canals (through a tube, direct divergence from the river with assistance of dam, or through open canals).

Problems

--No mechanism for allocation of water among different users raising conflict among them (herders, farmers) -Not enough water for everyone especially downstream people during months with peak demand -Payment for water is starting with the new law

Case 1: project activity

Activities:

-Installing drip irrigation system -Digging well (to secure water when no water is coming from canals) -Connecting to electricity source

Target crop*

Berry

Project time frame:

May 2014- September 2014 Seabuckthorn *Drip irrigation is more suitable for high value crops (because of high capital cost of the system) that are planted in rows.

Case 1: Cost and benefits of the project and challenges

Costs

1. Capital cost of drip irrigarion system 2. Cost of digging well 3. Cost of building transmission line 4. Operational cost of drip irrigation system and well (electricity and fuel usage etc)

Benefits

1. Water saving 2. Increased yield 3. Labor saving

Case 2: Overview of Selected Project for Water

Project Name:

Protection of upstream of Ulz River basin (protection of headwater stream of Ulz river).

Alternative scenario:

no protection

Case 2: project activity

Activities:

-fencing around the upstream -planting trees around the fence -Making exits, passways for households and animals to get to the water.

Project timeframe

: May 2014 October 2014

Case 2: Cost and benefits of the project and challenges

Costs

1. Cost of fence 2. Cost of tree planting 3. Maintenance cost

Benefits

1. Conservation of river run-off 2. Clean water 3. Sustainable water supply 4. Support recharging of ground water resources 5. Improved sustainability of ecosystem

Overview of (alternative)* Project for Water

Project Name:

Construction of a dam and 100 MW Hydro Power Plant on Orkhon river to collect flood water, produce electricity that can help regulate demand of the central energy system.

Alternative scenario:

Not building the proposed HPP by (1) Building coal fired thermal power plant or diesel power plant * Depending on how much more work it requires from us, to be selected simultaneously.

Case 2: project activity

Activities:

-construction of dam, hydro power plant and transmission line

Project timeframe

: 2014- 2018

Case 2: Cost and benefits of the project and challenges

Costs

1. Construction of dam 2. O&M cost 3. Accident cost 4. Downstream effect 5. Land inundation loss 6. Fishery loss

Benefits

1. Power generation 2. Flood protection 3. CO2 emission reduction 4. Peak demand regulation 5. Economic growth 6. Air pollution reduction