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.