Estimating carbon footprints and economic trade-offs in Mongolia's cashmere value chain: An integrated system dynamics approach

Background: The growing global demand for sustainable cashmere fibre in the textile industry has driven a surge in Mongolia's cashmere goat population, intensifying concerns about rangeland degradation and greenhouse gas (GHG) emissions. However, empirical evidence on the trade-offs between economic and environmental gains remains limited. Objective: This paper aims to assess ex-ante the impact and trade-offs of implementing upstream decarbonisation strategies, including herd management, preservation of rangeland, and trading policies within the cashmere value chain in Mongolia. Method: A Type I integration of system dynamics modelling and life cycle assessment was adopted. The system dynamics model comprises five interconnected modules that simulate the interactions among cashmere pro- duction, rangeland forage, fibre processing, end-product manufacturing, and economic and environmental im- pacts over 20 years at an annual timestep. Results and conclusion: Model results show that enteric fermentation and manure management account for 4.17% and 3.16% of total GHG emissions in the cashmere value chain, respectively. Electricity use during the dehairing process is a major contributor to GHG emissions, accounting for 46.79% of the total carbon footprint, followed by the transportation of dehaired cashmere to end processors, which contributes 33.5%. The results indicate that decreasing the offtake period from eight to five years at the prevailing offtake rates achieves the lowest economic-environmental trade-off at $0.17 per kg of CO2e reduced.
Significance: The findings show that a policy prohibiting the export of scoured cashmere from Mongolia would increase the economic trade-off, resulting in a loss of $3.86 in export revenue for each kilogram of CO2e reduced.