A «Biotope» is defined as a living place which can be distinguished from the physical environment around it by features like land shape, structure and even living communities within it, so it has a certain size and homogenous characteristic [1]. The objective of this study is to improve and amend the environmental damage and compensation assessment method for landscape projects in Mongolia by evaluating its shortfalls and necessary improvements using the biotope valuation method (BVM) as a benchmark, currently widely accepted and proven to be effective in Hessen, Germany, Sweden, Namibia, Australia and the Czech Republic. The biotope method has in common with most practically useful assessment methods, for example, the rapid biodiversity assessment approaches. Rapid rural appraisal (RRA), and its successor PRA (participatory RA), are other examples of a similar kind, from a different but equally difficult area of comprehensive impact assessment work [2]. The current method in use by Mongolia, which was adopted in 2010, though well-grounded in theory and detailed, in practice, it involves a very detailed and complex process which has been proven to be vulnerable to a high degree of subjectivity and thus resulting in different assessment values depending on who is conducting the calculations, parameter variables being used, any assumptions made in the absence of data that is not always available, and the time consuming procedures the assessment. Since it proved difficult to create a fully satisfying and innovative method with noticeably improved levels of accuracy, it was deemed more suitable to redevelop and amend the current method to lower complexity and subjectivity levels to improve its objectiveness and accuracy, which will result in more uniform and reliable assessment results. A well-developed compensation method in Mongolia could mean a notable improvement in local capacity for environmental economics in the valuation of environmental degradation and a new point of reference for environmental priority setting. Compensation of damages to the environment will be an important contribution of Mongolia toward the aims of the Convention of Biological Diversity (CBD) and the National Biodiversity Action Plan approved in 2016.