Long-term market effects of green public procurement

• Background and Policy Context: Previous chapters in this book have explored several product-oriented policies, including mandatory laws and product energy labelling, and discussed the importance of an appropriate policy mix. In this chapter, we examine the effects of demand-side policies, with a focus on green public procurement (GPP). GPP has been defined as ‘a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life-cycle when compared to goods, services and works with the same primary function that would otherwise be procured’. GPP, Bouwer et al. write, is the approach by which Public Authorities integrate environmental criteria into all stages of their procurement process, thus encouraging the spread of environmental technologies and the development of environmentally sound products, by seeking and choosing outcomes and solutions that have the least possible impact on the environment throughout their whole life-cycle. GPP can also be broken down into several actions the procuring agency can take. There are essentially two main ways to integrate environmental issues in GPP. (1) In the technical specifications that relate to the product or service. These requirements are mandatory for all bidders for a contract; failure to comply means the supplier is excluded from the process. (2) In the award criteria. Here, green criteria are ‘weighted’ - together with other criteria such as those related to price and quality - and the procuring agency weighs the bids according to a predefined scoreboard. GPP can become a very powerful policy, as governments are powerful actors in the market, not only as legislators but also as buyers. Governments also have the ability to influence markets where they represent a large share of the market (as in, e.g., office equipment, transport vehicles, electricity, health care products). The power of governmental actors is significant also because, unlike other market players, public organizations at various levels can coordinate their purchasing strategies in order to achieve policy aims. As discussed in Chapter 3 in this volume, GPP is one of the policies that can complement mandatory standards and encourage manufacturers to design greener products, by acting as ‘carrots’ rather than ‘sticks’.

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SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

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