Although economically coal has been a gift to Mongolia, it is having a more detrimental effect on Ulaanbaatar. In winter the capital is the most polluted city in the world as traditional nomadic gers pump out enough coal smoke to exceed the World Health Organization's recommended levels 14 times in particulate matter, resulting in more deaths than from car accidents.

To combat pollution, the government is rolling out an ambitious scheme to introduce 70,000 energy efficient stoves that will cut household emissions by 90 percent each. Funding from the Millennium Challenge Account (MCA) and additional support from the government allows the stove to sell at a heavily subsidized price throughout the provinces and around the city. In Ulaanbaatar one can buy a new eco-stove for just under USD 20.  XacBank leads the sales and distribution of the stoves.

“We provide the loans and manage delivery of the stoves directly to their homes,” said B. Delgerjargal, XacBank's vice president of retail banking. “Since July, we have sold over 25,000 stoves. Now with sales centers throughout the city, we expect to reach our target of 70,000 next year.”

Estimates indicate that 175,000 families live in the capital's ger districts, accounting for over half of the city's population, or a quarter of the country. Increased migration to the city has exacerbated the situation. Temperatures of -40 degrees Celsius and below drive people to burn plastics and tires. A report by Simon Fraser University estimates that one in every 10 deaths can be attributed to the dire pollution in Ulaanbaatar, through respiratory illness and cardiovascular effects that often times can lead to heart attacks and strokes. If those involved can meet their target, this project would reduce pollution by over a fifth in the city.

This program can by no means solve the problem completely. Mongolians will continue to burn coal and wood in open furnaces, placing a heavy toll on residents.  Another government project, the 100,000 Homes project, plans to move people to the suburbs and free the city center of congestion, pollution and health risks.