In Ulaanbaatar moving to renewable energy is of particular importance to the approximately 200,000 households living in the unplanned “ger” districts, where energy insecurity is a continuing challenge. In winter, coal burning is essential for survival, and often costs ger district families as much USD 400 per year, a huge financial burden considering that 40 percent of residents earn less than USD 90 per month.

Indoor and outdoor coal burning causes serious health issues and is a significant contributor to Mongolia’s carbon emissions. A project to install solar electricity in these homes would produce substantial emissions reductions with cascading social benefits that could be paid for by selling carbon credits.

But there were no simple tools or market platforms to price confirmed local emissions reductions and match them to our own desired investment in carbon offsets. The reality is that carbon markets are difficult to navigate, especially for small-scale buyers and sellers of carbon credits. For sellers, the system for auditing claimed carbon reductions and certifying carbon credits is costly, bureaucratic, and nearly impossible for small projects due to the need for in-person audits and in-depth reviews by an accredited agency. For buyers of carbon credits, the beneficiary of one’s purchase and how they will use the funds is often obscure.

One group that stood out was a start-up called URECA LLC. This young climate-tech company was founded by a team of Mongolians who combine expertise in renewable energy systems, computer engineering, sustainability, and other fields with a passion for climate change solutions. The URECA team has developed a mix of technologies that will enable small-scale and even household-level actors to produce verified carbon credits without the complex and costly accreditation that can stymie small projects.

Their solution combines AI-based technology that verifies renewable energy generation, both solar and wind, through data collected from smart meters, with a blockchain system to link carbon credits to specific producers and keep track of the exchange or retirement of those credits. This clever, cost-effective system will generate high-quality carbon credits, even for energy micro-producers, that will be linked to a URECA marketplace where they can be bought and sold. You can find more details about the system on the URECA website.

Initial baseline assessments suggest that each family will cut their yearly carbon emissions by 10–20 tons and reduce their energy costs by up to 70 percent. A significant question that this pilot seeks to answer is how highly the market will value URECA’s household carbon credits. If these households achieve the low-end target of USD 80 per ton, they can earn between USD 800 and ISD 1,600 per year producing and selling carbon credits, in addition to saving hundreds of dollars on energy costs. This will significantly improve their quality of life, while demonstrating a pathway to reducing the harmful levels of air pollution that afflict Ulaanbaatar every winter.