Determinants and Effectiveness of Green Public Procurement Adoption

Abstract

Public procurement accounts for a large share of Gross Domestic Product in many countries. Given its impact, governments and other public authorities can leverage their purchasing decisions to pursue welfare goals; among these, environmental protection and climate change mitigation have particular priority. By using procurement practices that account for the environmental quality of bids – so-called Green Public Procurement – public agents have the opportunity not only to reduce the environmental impact of their activities but also to create demand and markets for environment-friendly products and services, thereby creating incentives for production and consumption of green options. Despite its potential as an environmental policy, the implementation of Green Public Procurement is so far limited. There is a small, albeit growing, economic literature on the determinants of, and barriers to, the adoption of Green Public Procurement as well as on its environmental effectiveness. This contribution summarizes the existing literature, identifies gaps to be addressed by future research, and formulates policy recommendations on how to realize the potential of Green Public Procurement as an environmental policy.