Public procurement initiative to stimulate green economy

A new international initiative to fast track a global transition to a green economy by harnessing the market-shifting power of government and local authority spending was announced by UN Environment Programme (UNEP) and partners at the Rio+20 Earth Summit yesterday.

Supported by more than 30 governments and institutions, the International Sustainable Public Procurement Initiative (SPPI) aims to scale-up the level of public spending flowing into goods and services that maximize environmental and social benefits.

Studies indicate that public procurement, which represents between 15 and 25 per cent of GDP, represents a tremendous opportunity to stimulate green innovation and sustainability.

“Sustainable public procurement is a key enabling instrument for countries that want to make the transition towards a green economy,” said UN Under-Secretary General and UNEP Executive Director, Achim Steiner. “The SPP initiative offers governments the opportunity to lead by example by harnessing their purchasing power to drive markets towards a greener, more innovative and more sustainable path.

“The SPP initiative will push the process forward towards the creation of robust regulatory frameworks and collaboration between North and South; public institutions and the businesses sector at an early stage of the process. We hope the initiative receives full support at Rio+20 and that more countries and organizations commit to join and contribute to its success.”

Examples from around the world show that sustainable public procurement has the potential to transform markets, boost the competitiveness of eco-industries, save money, conserve natural resources and foster job creation.

• Across the OECD group of countries, public procurement represents close to 20 percent of GDP (over USD4,733 billion annually), while in developing countries the proportion can be slightly higher.
• In India, for example, government procurement is worth about USD300 billion and is expected to grow by more than 10 per cent annually in the coming years.
• Japan’s Green Purchasing Policy, estimated to be worth about USD545 billion in 2010, has contributed to the growth of the country’s eco-industries.
• The city of Vienna saved USD56.25 million and over 100,000 tonnes of CO2 between 2001 and 2007 through its EcoBuy programme.
• Europe could reduce energy used for street lighting by 64 percent – or 38 TWh of electricity – by installing smarter lighting solutions.
• In Hong Kong replacing incandescent traffic lights with LED has generated savings of USD240,000 over the lifespan of LED modules, which also allow for projected annual savings of 7.88 million KWh of electricity and a reduction of 5,500 tonnes of CO2 emissions.
• In Brazil the Foundation for Education Development succeeded in saving 8,800 m3 of water, 1,750 tonnes of waste and 250 kg of organohalogen compounds, providing the equivalent of one month economic activity to 454 waste pickers, through its decision to replace regular notebooks with ones made of recycled paper in 2010.

Sustainable public procurement has been recognized as a priority theme worldwide and is currently being implemented in many developed and emerging countries.

The EU adopted an objective of 50 percent green public procurement for a list of 20 product groups. In the US, President Obama signed an Executive order in 2009, requiring that 95 per cent of all applicable procurement contracts at the Federal level must meet sustainability requirements. And Brazil's Central Purchasing System already contains more than 550 sustainable products and the value of procurement contracts that integrate sustainability criteria increased by 94 per cent from 2010 to 2011

The new SPP initiative seeks to back the worldwide implementation of sustainable public procurement by promoting a better understanding of its potential benefits and impacts and facilitating increased co-operation between key stakeholders. The SPPI objectives include: