Green Public Procurement: Catalysing the Net-Zero Economy
Public procurement is responsible for a significant proportion of global greenhouse gas (GHG) emissions. Governments can accelerate their path to net-zero operations by adopting the green procurement framework – an approach designed by the World Economic Forum and BCG for the Mission Possible Partnership.
Public procurement is responsible for a significant proportion of global greenhouse gas (GHG) emissions. Governments can accelerate their path to net-zero operations by adopting the green procurement framework – an approach designed by the World Economic Forum and BCG for the Mission Possible Partnership.
"Achieving net zero will require collaboration between governments and companies. Importantly, this report shows that the transition to green public procurement benefits all stakeholders. The transition to green procurement practices shouldn't be perceived as a cost burden for industries and the public sector, but rather as something that creates long-term sustainable economic growth."
—Børge Brende, President of the World Economic Forum
Among the major findings of the report:
- Public procurement is responsible for a significant proportion of GHG emissions. Governments currently spend $11 trillion every year, producing 7.5 billion tonnes of direct or indirect GHG emissions, roughly 15% of the world’s total.
- Governments could have significant influence on industries that are heavily dependent on public spending. Most of the emissions associated with public procurement – up to 75% of the total – stem from the activities of six industries: defence and security, transportation, waste management services, construction, industrial products, and utilities. Public spending accounts for a large proportion of revenues of defence and security, waste management services and construction.
- Pursuing net-zero goals in public procurement will boost the green economy. The private investment and new jobs triggered by greener public procurement, in aggregate, will boost global GDP by around $6 trillion through 2050 – a significant proportion of the green economy's total GDP of $70 trillion.
- A considerable proportion of public procurement’s GHG emissions can be abated at a reasonable cost. Approximately 40% of all emissions related to public procurement can be abated for less than $15 per tonne of GHG emissions, raising procurement costs by just 3% to 6%. The short-term green premium is expected to decline over time, as new technologies are scaled up, making the production of net-zero products more efficient.
- The green procurement framework can help governments accelerate public procurement decarbonization. Public procurement is complex and highly decentralized, making it difficult to devise coherent decarbonization strategies. The framework is designed to help procurement officials meet their goals by creating transparency in baselines and targets, optimizing for GHGs, engaging suppliers, pushing ecosystem.
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