IISD leads global action to increase public spending on green products and stimulate private investment

WINNIPEG—October 30, 2012—The International Institute for Sustainable Development is leading the newly established Partnership for Procurement and Green Growth aimed at stimulating global demand for green products and services by leveraging governments' purchasing power.

Danish Minister for the Environment Ida Auken welcomed the establishment of the partnership, officially launched at the Global Green Growth Forum, a high-level meeting of 250 business, government and civil society leaders in Copenhagen earlier this month.

IISD has produced a guidebook, Procurement and Green Growth: The Story Continues…, which includes a number of case studies to demonstrate how governments can use their purchasing power to encourage industry to develop and market green growth products and services.

In a foreword to the report, Auken says many governments have yet to appreciate how their purchasing decisions can stimulate innovation that creates economic value and delivers environmental benefits at the same time, with significant benefits for consumers as well.

"I welcome the partnership and this report, and I hope it will serve as inspiration for everybody to green their procurement," she says.

IISD program leader Oshani Perera said members of the partnership are key players in the green public procurement and public private partnerships debate. The partners include the Danish Ministry of Environment; State Government of Sao Paulo, Brazil; Confederation of Indian Industry Centre for Excellence on Sustainable Development; International Road Federation; Electronic Product Environment Assessment Tool; the United States-based Green Electronics Council; Ecos; Global Energy Basel; Philips; Abu Dhabi Sustainability Group; Infrastructure Development Finance Corp.; Thomson Reuters Advisory Services, Commodities and Energy; and Danfoss.

"We want partnership members to work within their own constituencies and jointly undertake projects to help governments use their purchasing power to trigger global demand for green products," Perera said. "Producers must be confident there is sufficient market demand for green products and services before they will make the investment decisions necessary to produce goods and services that are sustainable and profitable. And the purchasing power of government can do just this."

Government purchasing adds up to substantial sums, accounting for as much as 45 per cent of government budgets. In most countries, government procurement of goods and services accounts for 15 per cent to 20 per cent of GDP. In 2011, Organization for Economic Co-operation and Development countries spent on average 12 per cent of GDP on procurement, with the United States around 12 per cent and 17 per cent in the European Union.

When procurement contracts of state-owned utilities are included, estimates rise to between 2 per cent and 13 per cent of GDP. Government procurement in developing and emerging economies is about 25 per cent to 30 per cent of GDP. In 2011, it was estimated that procurement in China accounted for about 20 per cent of GDP and in India, it was around 30 per cent in 2008. In the last decade, procurement represented at least 25 per cent of Vietnam's GDP. -end-

Please contact Oshani Perera for more information at +41 22 917 8412 or operera@iisd.org or Nona Pelletier, IISD manager, public affairs at +1 (204) 958-7740, mobile: +1 (204) 962-1303, or email npelletier@iisd.ca.