Is public procurement fit for reaching sustainability goals? A law and economics approach to green public procurement

Abstract

Green public procurement is assumed to have a strong steering effect. The recent EU Green Deal contains proposals to amend green public procurement rules from voluntary to mandatory regulation, which has been endorsed by several legal scholars. At the same time, the effectiveness of green public procurement as an environmental policy tool has been studied in economics, where research results present a reserved approach towards green public procurement’s effectiveness. This article examines green public procurement applying a law and economics methodology, with the goal of combining the approaches from different disciplines and finding ways in which environmental objectives can be effectively addressed through procurement regulation. The main conclusions are that the steering effect, costs and potential environmental impact of green public procurement vary in different industries and therefore a sector-specific approach should be adopted in the development of green public procurement regulation. In order to encourage companies to invest and develop their operations in a greener direction, it is important that a large number of contracting authorities use harmonized green public procurement criteria. Further, the effects of green public procurement regulation on competition and emissions from the private consumer market should be monitored and the potential of public procurement to achieve environmental objectives should be explored and compared with other policy options.

How to increase the uptake of circular public procurement? Lessons learned from local authorities in Sweden

“…They postulate that the force of public procurement to shift market practices resides in its strategic nature and materialises across several dimensions (Witjes and Lozano, 2016). Firstly, bidders must necessarily comply with the contracting authorities’ sustainable or circular requirements, which can be monitored due to the relationship between the contracting authority and the awarded bidder (Halonen, 2021). Furthermore, the purchasing habits followed by public authorities set a specific benchmark, which contributes to promoting the societal acceptance of those products, services or works purchased (Arrowsmith, 2010).…”

“…Moreover, it has been argued that CPP could indeed spur innovation and open new markets (Ntsonde and Aggeri, 2021). In parallel, at the policy and regulatory level, the European Commission has postulated circular procurement as an enabler for transitioning to sustainability, first in the CE Action Plan 2015, and then in the European Green Deal (Halonen, 2021). The updated CE Action Plan (European Commission, 2020) has reinforced this notion by outlining the gradual introduction of mandatory requirements for green/circular criteria and targets.…”

Developing together: the Finnish way of promoting sustainable public procurement

“…Despite the significance of SPP in regard to promoting sustainable development, it has been criticised for neither fulfilling its potential in the transition towards sustainable cities (Alhola and Kaljonen, 2017) nor becoming an established practice (Harland et al , 2019). For many years, there has been a debate over the effectiveness of public procurement in steering development towards climate targets and other sustainability targets due to, for example, its resource-intensive nature (Andersson et al , 2020; Halonen, 2021; Lundberg and Marklund, 2013; Sönnichsen and Clement, 2020). On the other hand, there is also evidence from practical examples that public procurement can lead to successful and cost-effective emission reductions when it is used among other steering methods (Kalimo et al , 2021).…”

European Green Deal – the way to Circular Public Procurement

“…8 In the circular economy concept, business models should change, meaning that "products should become fully reused or recycled, which requires reverse logistics systems, or firms should turn towards product-service system (PSS) and sell performance related to serviced products. Furthermore, products have to be made in specific processes, with recycled materials and specific resources, which may require not only specific capabilities but also creating reverse logistics systems and maintaining relationships with other companies and customers to assure closing of material loops" 9 Several authors reviewed the most important components of circular business models, namely reversed supply chain logistics.…”