Access to a reliable source of heat isvital to sustain life in Mongolia. Particularly so, forfamilies living in the traditional tents, who today inUlaanbaatar - the capital city - rely on burning mineralcoal. However, the incomplete combustion of coal byinefficient metal stoves, releases polluting gases,affecting not only households' interior, but the airquality of the entire city. Additionally, air pollution isalso caused by three central combined heating, and powerstations coal-fueled boilers, and vehicle emissions. Overthe 1999-2001 period, the Energy Sector ManagementAssistance Programme (ESMAP) assessed the situation in termsof household heating habits, and consumption levels, andidentified the main local participants, towards improvingstoves and their impact on air pollution. Appropriateschemes were designed for widespread uses, and adissemination program was elaborated, including financialsupport from the Global Environment Facility (GEF) for itsimplementation. The report presents the findings, andlessons learned, highlighting the need to further exploreother alternatives, such as the use of briquettes,installation of thermal bricks inside combustion chambers,and extending credit to consumers, increasing theirpurchasing power. It further stipulates fuel expenses can becut by one-third, air pollution reduced, thus improvingliving conditions, public health, as well as publicexpenses, and the environment.