What Is Green Public Procurement?
Green public procurement (GPP) refers to the process by which public authorities seek to acquire goods, services, and works with a reduced environmental impact throughout their lifecycle, compared to products or services with the same primary function that would otherwise be procured. This practice falls under the broader umbrella of public finance and plays a crucial role in directing government spending towards more sustainable outcomes. By integrating environmental criteria into their purchasing decisions, public bodies aim to mitigate negative environmental impact and promote sustainable consumption and production patterns.
History and Origin
The concept of integrating environmental considerations into public purchasing began to gain traction in the late 20th century, driven by increasing awareness of environmental degradation and the significant purchasing power of the public sector. Early initiatives were often voluntary and varied by country. For instance, the U.S. Environmental Protection Agency (EPA) initiated work on environmentally preferable purchasing in 1993 with Executive Order 1287331.
Major international organizations have played a significant role in formalizing and promoting green public procurement. The Organisation for Economic Co-operation and Development (OECD) began its activities in "greener public purchasing" in 199630. In 2002, OECD Environment Ministers approved a Council Recommendation on Improving the Environmental Performance of Public Procurement29. Similarly, the United Nations Environment Programme (UNEP) has been actively promoting Sustainable Public Procurement (SPP), which encompasses GPP, at national, regional, and global levels since 2005, providing implementation guidelines to assist governments worldwide26, 27, 28.
The European Union has been a key driver of GPP. The European Commission defined GPP in its 2008 Communication "Public procurement for a better environment" as a process where public authorities aim to procure goods, services, and works with a reduced environmental impact across their lifecycle25. This foundational document highlighted GPP's voluntary nature but emphasized its importance in fostering a resource-efficient economy within the EU. Following the adoption of the 2020 Circular Economy Action Plan, the Commission has been proposing minimum mandatory GPP criteria and targets in sectoral legislation to encourage wider adoption24. Efforts are underway to strengthen these frameworks, with discussions on potentially making GPP mandatory in the EU to align public spending with climate goals and foster competitiveness, as highlighted in recent policy discussions22, 23.
Key Takeaways
- Green public procurement involves public authorities purchasing goods, services, and works with a reduced environmental impact.
- GPP utilizes the significant purchasing power of governments to drive environmental sustainability.
- It considers the entire lifecycle cost of products and services, not just initial price.
- GPP encourages innovation in green technologies and sustainable practices within industries.
- While often voluntary, GPP is increasingly being integrated into national and international policy frameworks.
Interpreting Green Public Procurement
Interpreting green public procurement involves understanding its strategic intent and practical application. GPP is not merely about buying "green" products but about embedding environmental considerations throughout the entire supply chain of public acquisitions. This means evaluating offers not solely on the lowest price, but also on criteria such as energy efficiency, recyclability, carbon footprint, and the use of sustainable materials. The aim is to achieve broader policy objectives beyond immediate cost savings, such as mitigating climate change, promoting resource allocation efficiency, and fostering economic growth in green sectors.
For GPP to be effective, it requires a shift in procurement mindsets, moving towards a cost-benefit analysis that factors in long-term environmental and social benefits alongside traditional financial metrics. This often necessitates robust frameworks for setting clear, verifiable, and ambitious environmental criteria for various product and service categories.
Hypothetical Example
Imagine a municipal government needs to replace its fleet of service vehicles. Traditionally, the procurement department would select vehicles based primarily on purchase price and basic operational costs. Under a green public procurement policy, the municipality would issue a tender that includes specific environmental criteria.
For instance, the tender might require vehicles to meet certain emissions standards, have high fuel efficiency, or be electric or hybrid. It might also favor manufacturers who demonstrate sustainable manufacturing processes and offer end-of-life recycling programs for the vehicles and their components.
The municipality would evaluate bids not only on the initial purchase price but also on the projected lifecycle cost, including fuel consumption, maintenance related to emissions control, and disposal costs. A slightly more expensive electric vehicle might be chosen over a cheaper gasoline-powered one if its lower emissions, reduced operational fuel costs, and longer lifespan result in a lower overall environmental and financial burden over the vehicle's lifetime. This approach ensures that the municipality's investment aligns with its sustainability goals while potentially yielding long-term savings.
Practical Applications
Green public procurement shows up in various aspects of government operations, influencing markets and promoting sustainable development. Governments use GPP to:
- Stimulate Green Markets: By creating demand for environmentally friendly products and services, GPP provides incentives for businesses to invest in research and development of sustainable alternatives. This can be particularly impactful in sectors where public purchasers represent a large share of the market, such as infrastructure or public transportation.
- Achieve Climate Goals: Public procurement represents a significant portion of national GDP (around 12% on average in OECD countries and up to 30% in many developing countries)21. By integrating green criteria, governments can significantly reduce their own carbon footprint and contribute to national and international climate targets, like those under the Paris Agreement. The OECD highlights how GPP is increasingly recognized as a strategic tool for this purpose20.
- Promote Circular Economy Principles: GPP often emphasizes circularity, encouraging the procurement of durable, repairable, and recyclable products, thereby reducing waste and promoting the efficient use of resources. The European Commission, for example, is keen on emphasizing circular economy aspects in new or revised GPP criteria19.
- Lead by Example: When public authorities adopt GPP, they demonstrate leadership in sustainability, encouraging private sector companies and citizens to follow suit. This can lead to broader shifts in consumption and production patterns.
- Enhance Transparency and Accountability: Effective GPP requires robust monitoring and reporting systems to track its implementation and impact. This process can enhance public accountability and reinforce trust in public institutions by demonstrating how taxpayer funds contribute to environmental objectives18.
Limitations and Criticisms
Despite its numerous benefits, green public procurement faces several limitations and criticisms:
- Perceived Higher Costs: One of the primary concerns is the perception that GPP inherently leads to higher initial costs compared to traditional procurement focusing solely on the lowest price16, 17. While lifecycle costing can often demonstrate long-term savings, the upfront budget may be larger, which can be a barrier for public authorities with constrained budgets.
- Lack of Clear, Standardized Criteria: Developing clear, verifiable, and ambitious environmental criteria for a wide range of products and services can be complex. The absence of harmonized criteria across different jurisdictions can create confusion for suppliers and procurement officers, complicating cross-border competition14, 15.
- Implementation Challenges: Shifting to GPP requires increased expertise, new methodologies, and more significant monitoring efforts from procurement professionals. Lack of adequate training and capacity building can hinder effective implementation13.
- Voluntary Nature: In many regions, including parts of the EU, GPP remains largely voluntary, meaning its uptake depends on individual member states and public bodies11, 12. This voluntary nature can lead to inconsistent application and varying levels of ambition across different entities, making it an "under-utilised tool"10.
- Measurement of Impact: Quantifying the precise environmental and economic benefits of GPP can be challenging due to a lack of robust data and monitoring systems. This makes it difficult to fully assess its effectiveness as an environmental policy instrument9.
- Risk of Greenwashing: There is a potential for "greenwashing," where suppliers may misrepresent or exaggerate the environmental benefits of their products or services to win contracts8. Strong verification mechanisms and clear environmental labeling are crucial to mitigate this7.
Green Public Procurement vs. Sustainable Public Procurement
While often used interchangeably, "Green Public Procurement" (GPP) and "Sustainable Public Procurement" (SPP) have distinct scopes:
| Feature | Green Public Procurement (GPP) | Sustainable Public Procurement (SPP) |
|---|---|---|
| Primary Focus | Environmental considerations, aiming to reduce negative environmental impacts throughout a product's or service's lifecycle. | Broader focus on all three pillars of sustainable development: environmental, social, and economic. It considers factors beyond just environmental impact. |
| Criteria Examples | Energy efficiency, reduced emissions, use of recycled materials, biodegradability, waste reduction. | Includes all GPP criteria, plus social aspects (e.g., fair labor practices, non-discrimination, human rights, accessibility) and economic aspects (e.g., local economic development, support for small and medium-sized enterprises). |
| Goal | To achieve specific environmental objectives through public purchasing power. | To achieve a wider range of sustainable development goals, encompassing environmental protection, social equity, and economic viability. UNEP actively promotes SPP as a key tool for achieving Sustainable Development Goal (SDG) 12 on responsible consumption and production6. |
| Relationship | GPP is a subset or component of SPP. All green procurement is inherently sustainable in an environmental sense, but not all sustainable procurement is exclusively "green." | SPP is the overarching concept that integrates environmental, social, and economic factors into procurement decisions, making it a more holistic approach to public purchasing. |
In essence, GPP focuses specifically on the "green" or ecological aspects of purchasing, whereas sustainable public procurement takes a more holistic view, incorporating social and economic considerations alongside environmental ones. The confusion often arises because environmental concerns are frequently the initial or most prominent drivers for public bodies to adopt more responsible purchasing practices.
FAQs
How does green public procurement affect businesses?
Green public procurement can significantly impact businesses by creating demand for environmentally friendly products and services. This incentivizes companies to invest in sustainable production methods, develop green innovations, and adopt higher environmental standards to remain competitive in public tenders. It can also lead to new market opportunities for businesses specializing in eco-friendly solutions.
Is green public procurement mandatory?
The mandatory nature of green public procurement varies by country and region. While some governments and supranational bodies like the European Union have introduced mandatory GPP criteria or targets for certain product categories, in many cases, it remains a voluntary instrument, with member states determining the extent of its implementation. There is a global trend toward increasing its mandatory adoption to accelerate climate and sustainability goals5.
What are the main challenges in implementing green public procurement?
Key challenges include the perception of higher initial costs, a lack of clear and harmonized environmental criteria, insufficient training and expertise among procurement professionals, and difficulties in monitoring and measuring the actual environmental benefits. Overcoming these requires strong political will, robust policy frameworks, and capacity building for public authorities and suppliers.3, 4
How does GPP contribute to climate change mitigation?
GPP contributes to climate change mitigation by directing significant public spending towards low-carbon, energy-efficient, and resource-saving goods and services. By choosing products with reduced greenhouse gas emissions throughout their lifecycle, governments can lower their institutional carbon footprint and stimulate the market for clean technologies, thus influencing broader industrial and consumption patterns.2
What is the role of lifecycle costing in GPP?
Lifecycle costing is a critical tool in green public procurement because it allows procurement bodies to assess the total cost of a product or service over its entire lifespan, rather than just its initial purchase price. This includes costs related to energy consumption, maintenance, disposal, and potential environmental externalities. By considering these broader costs, GPP can demonstrate that environmentally friendly options, while sometimes more expensive upfront, may offer significant long-term savings and reduced environmental burdens1.