The evaluation of natural capital and environmental services has always been an important step in the implementation of sustainable development concepts and policies. The results presented in this study address the demand for environmental support of the economy of Xilinguole League in the Inner Mongolia Autonomous Region as well as the value of its natural and human-made capital. The results show that the reliance of the economy of Xilinguole League on local and imported non-renewable resources (coal and minerals) decreases both the environmental and economic sustainability of the area. Emergy-based performance indicators of the Xilinguole League economy show a low sustainability index (ESI=0.79), though it is higher than for the Chinese economy as a whole (ESI=0.47), as well as a low percentage of renewable resources being used (%REN=0.16, though this is higher than for all of China, 0.09). In contrast, the grassland-based livestock sector shows a higher renewability index (%REN=0.67) and sustainability (ESI=9.61). The emergy exchange ratios (exported emergy/imported emergy) are calculated to be 4.38 for the livestock system and 4.28 for the Xilinguole economy, which is much higher than the value of 1.74 for the overall Chinese economy, indicating uncompensated overexploitation of local systems (meat and coal, respectively). Intensified coal exploitation and intensive cattle grazing are discussed to support the decision-making process for setting local energy policy and ecological compensation. It is proposed that conservation of coal resources (avoiding misuse and moderating excess extraction and trade) and protection of natural grassland capital are more advantageous in emergy terms than the "blind" pursuit of accelerated, economic growth. (c) 2013 Elsevier Ltd. All rights reserved.