The People’s Republic of China spent more than CNY 1.6 trillion (USD 252 billion) on procurement in 2013, accounting for 11.7 per cent of all national spending.
In light of these numbers, the potential environmental, social and economic multipliers of greening government purchases become evident. The benefits of a comprehensive and efficient green public procurement (GPP) policy are not limited to the green products and services the public sector buys, but will have a ripple effect that encourages green consumption nationwide.
The significant purchasing power of the government will provide the much-needed incentives in order for businesses to invest and innovate in green products and services to meet the government’s guaranteed long-term and high-volume demand.
Building on the results of the IISD GPP Model, this project provides targeted recommendations addressing the development areas identifies to improve GPP in China. We analyzed five product categories – air conditioners, lighting, cars, paper, and cement – because they represent significant financial flows in procurement, have notable environmental impacts and domestic production, and have sufficient data available to facilitate their analysis.
The model focuses on the inclusive cost of procurement by considering both the fiscal and non-fiscal costs associated with government procurement. Non-fiscal costs included in the model focus on the health and environmental impacts of pollution resulting from the production, use and disposal of products.
The results of the model show that increased GPP ambition and stringency in China have several benefits. These benefits include energy cost savings, avoided health costs and avoided environmental costs, in addition to other nonmodelled but notable benefits, such as green innovation, market development and green industry development. Over the model’s time horizon, the extra costs associated with realizing these significant benefits only exceed 20 per cent in one instance, and in some cases are even negative – meaning that, for some products, with time, GPP will pay for itself.