The relevance of Life Cycle Costing in Green Public Procurement

Benedetta Nucci, Fabio Iraldo and Maria Rosa De Giacomo

ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, 2016, vol. 2016/1, issue 1, 91-109

Abstract: The aim of this paper is to discuss the relevance of Life Cycle Costing (LCC) in public procurement in the European context after the publication of the Directive 2014/24/EU. After a description of the concept, the dimensions and main features of LCC, the contents of the Directive are briefly presented, focusing on the requirements related to life cycle costing. The main issues related to the assessment of LCC are then discussed, such as discounting and uncertainty of the data, but the paper mostly concentrates on a key-aspect of the methodology: the monetization of environmental externalities, since the Directive emphasizes that this aspect shall also be included in the LCC calculation. Moreover, in order to explore the relevance of LCC in public procurement, a survey to 119 public administrations of different countries has been carried out. The main findings of the survey, presented in our paper, show that the Life Cycle Costing approach is implemented by only a small part of public administrations, in spite of the fact that Green Public Procurement, normally considered as a driver for LCC, is very diffused among the same administrations

Date: 2016
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