In the last two decades Mongolia’s vast areas of pastureland have been rapidly degraded and desertified. Although the main cause of this national crises is believed to be climate change, overgrazing and livestock over-population are also major contributing factors. This study has assessed the degradation and the economic value of the livestock (particularly goats) that are causing much of the damage. To find a solution to the crisis, it has also evaluated a number of key policy options. This study recommend that a communal pasture management system should be set up and that fees should be imposed on the use of pastures. This mix of policies should ensure that the use of pasture land become sustainable. It should also secure the long-term livelihoods of herder households.