Green Public Procurement as tool for the Green New Deal
Ana-Maria Dimand
In 2018, the Federal government spent around 890 billion dollars on contractual services and supplies. State and local governments spend an additional 1.72 trillion dollars annually. By leveraging its vast purchasing power, governments can put their enormous leverage behind the Green New Deal (GND) and encourage business to make a transition to low carbon production systems. Green Public Procurement (GPP) conveys a simple yet powerful message to all businesses: lowest upfront prices alone will not ensure government contracts; businesses will need to demonstrate climate responsibility as well.
Challenges in Green Public Procurement Adoption
The 2018 NIGP Sustainable Procurement Survey revealed that only about fifth of local and state governments surveyed have a GPP policy in place. Public procurement professionals were asked about factors that facilitate or challenge GPP adoption. Results revealed that these professionals still view higher costs of green products and services as a significant obstacle among both local and state governments. Because most governments need to work with tight budgets, perceived higher costs of GPP hinder its uptake. 33% and 23% of respondents respectively from local and state governments cite cost as a barrier for GPP implementation.
But higher costs are not the only challenge. 23% of local governments and 21% of state governments note that the lack of staff, training, and knowledge about GPP hinders implementation. This takes place both when incorporating environmental requirements into call for bids and in examining the bid proposals. In addition, governmental procurement officers find that there are often few vendors that can offer green products at competitive prices. Finally, GPP can have equity implications as well if it places e suppliers from disadvantaged areas and backgrounds, especially from rural areas, at a less competitive position.
Learning Green Procurement from the Private Sector?
In recent years, many prominent firms have sought to aggressively cut their carbon emissions by utilizing their purchasing power. Specifically, by collaborating with their supply chains, companies such as Walmart, Coca-Cola, Dell are able to provide customers with environmentally friendly products. By mandating suppliers across 30 countries to participate in carbon disclosure projects, Walmart reduced 20 million metric tons of emissions in one year. Coca-Cola is seeking to collect and recycle all cans and bottles they sell by 2030. With energy saving measures and technologies, Dell’s suppliers cut consumption with more than 1.6 million kw in 2017. While the private sector leads by example, the public sector still lags behind.
A transition to a low carbon economy will require governments to leverage their purchasing power to influence their suppliers. However, incorporating climate requirements in their call for bids is complex because the procurement officers must know what specific requirements need to be incorporated, assess the claims made by suppliers about the climate virtues of their products, asses the trade-off between price and climate features, and finally assess how equity goals might cohere with such climate focused GPP policies. If GPP is to become an important tool for the Green New Deal, as it must, GND advocated need to think of investments in administrative infrastructure so that procurement officers have the skill set to assess climate impact of products their governments might purchase from the outside.
Ana-Maria Dimand is a doctoral candidate in the Department of Public Policy and Administration at Florida International University.