Reforming livestock taxation for sustainable rangeland use: Macro-level analysis on Mongolia’s livestock tax law implementation
DOI:
https://doi.org/10.5564/pmas.v65i03.4530Keywords:
Livestock taxation, Desertification, NDVI, Sustainable grazingAbstract
This study evaluates the effectiveness of Mongolia’s Livestock Tax Law (LTL), implemented in 2021, as an environmental policy instrument to mitigate desertification by regulating herd sizes and supporting rangeland rehabilitation. Specifically, it asks whether livestock taxation can influence livestock numbers and improve vegetation conditions. Panel data from 330 soums spanning the period from 2002 to 2024 were analyzed, integrating livestock and taxation records, satellite-derived Normalized Difference Vegetation Index (NDVI), and climate variables. Data prior to 2021 were used to establish a baseline and control for climatic variability and external shocks, enabling robust before-and-after comparisons of policy impacts.
Employing generalized least squares regression models, the present study examines the following: (1) the effect of tax collection on livestock numbers, and, (2) the relationship between livestock density, climate factors, and vegetation health measured by NDVI. Results show that tax collection has a statistically significant, but relatively weak positive association with livestock numbers (β = 0.0132, p = 0.039), while herd persistence over time remains strong, with recent declines likely driven by environmental and socio-economic shocks. Livestock density exerts a statistically insignificant effect on NDVI (β = -0.0019, p = 0.615). In contrast, precipitation and land surface temperature strongly enhance NDVI, underscoring the dominant influence of climate factors over grazing pressure.
Regional ecological zones significantly shape both livestock density and NDVI values, with temperate regions showing comparatively healthier vegetation. Further modeling of ecologically differentiated tax adjustments - based on rangeland carrying capacity and regional economic conditions - demonstrates potential gains in policy effectiveness.
Overall, the findings highlight the limited direct ecological impact of livestock taxation, but underscore its potential when combined with ecological differentiation and stronger compliance mechanisms. Strengthening these dimensions is critical for enhancing both the environmental and fiscal outcomes of the LTL.
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