Green Public Procurement as an Environmental Policy Instrument:Cost Effectiveness

Sofia Lundberg () and Per-Olov Marklund ()
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Per-Olov Marklund: Center for Regional Science at Umeå University, Postal: S 901 87 Umeå, Sweden

No 847, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: Estimates by the European Commission indicate that public authorities within the European Union typically purchase goods and services corresponding to approximately 16 percent of GDP per annum. Hence, it is believed, private firms can be stimulated to invest in less polluting production technologies if the market power of public bodies is exerted through Green Public Procurement (GPP) policies and legislation. It is commonly argued that there are considerable possibilities for cost-effective GPP. The aim of this paper is to scrutinize this argument by specifically answer the question whether GPP can work as a cost-effective environmental policy instrument in terms of leading firms to reducing emissions at least cost to society. Our main finding shows that this is not the case.

Keywords: Auctions; Abatement; Compliance cost; Environmental objectives; Green technology; Investments (search for similar items in EconPapers)
JEL-codes: H57 Q01 Q28 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-09-13
New Economics Papers: this item is included in nep-env and nep-res
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Citations: View citations in EconPapers (6)

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