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Procurement, Innovation and Green Growth: the Story Continues

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Procurement, Innovation and Green Growth: the Story Continues Foreword by the Hon. Ida Auken, Minister for the Environment, Denmark Procurement, Innovation and Green Growth: The story continues... © 2012 The International Institute for Sustainable Development Published by the International Institute for Sustainable Development. ISBN: 978-1-894784-60-3 International Institute for Sustainable Development The International Institute for Sustainable Development (IISD) contributes to sustainable development by advancing policy recommendations on international trade and investment, economic policy, climate change and energy, and management of natural and social capital, as well as the enabling role of communication technologies in these areas. We report on international negotiations and disseminate knowledge gained through collaborative projects, resulting in more rigorous research, capacity building in developing countries, better networks spanning the North and the South, and better global connections among researchers, practitioners, citizens and policy-makers. IISD’s vision is better living for all—sustainably; its mission is to champion innovation, enabling societies to live sustainably. IISD is registered as a charitable organization in Canada and has 501(c)(3) status in the United States. IISD receives core operating support from the Government of Canada, provided through the Canadian International Development Agency (CIDA), the International Development Research Centre (IDRC), and from the Province of Manitoba. The Institute receives project funding from numerous governments inside and outside Canada, United Nations agencies, foundations and the private sector. Head Office 161 Portage Avenue East, 6th Floor, Winnipeg, Manitoba, Canada R3B 0Y4 Tel: +1 (204) 958-7700 | Fax: +1 (204) 958-7710 | Website: www.iisd.org Partnership for Procurement and Green Growth members: www.iisd.org/pgg In partnership with: 2 Procurement, Innovation and Green Growth Foreword We live in times of multiple crises. We are confronted not only with a financial or economic crisis, but also with the severe challenges from a climate and a natural resource crisis. Our natural resources, which we rely on for all economic activity and social and economic development, are under severe pressure, and it is clear that business as usual is not an option. Instead, our response to these crises must be one that is capable of dealing with both crises at the same time. Long-term prosperity requires a transition to a new growth paradigm based on resource efficiency. A growth that delivers new jobs, improves social well-being and reduces vulnerability towards imports of resources, while respecting the carrying capacity of ecosystems. This growth paradigm is called green growth. As this report shows, green public procurement possesses great and largely unharnessed potentials in catalyzing green growth. By utilizing the massive purchasing power of the public sector at all levels, green public procurement can transform the market, stimulate green industrial growth and create incentives to invest in, innovate and scale up green solutions when demand is secured and well directed. By doing so, green public procurement can help solve multiple problems at the same time. It can trigger green innovation—innovation that creates economic value and delivers environmental benefits at the same time. And it can deliver radical change by spurring new markets and new business models while at the same time having significant spill-over effects on private household consumption through increased awareness and mainstreaming of green products. Bold, visionary and innovative governments, businesses and cities have already realized the potential of green public procurement and lead the way. This report compiles real initiatives from all parts of the world to demonstrate the benefits of green public procurement. It shows that green public procurement can help deliver both economic and environmental results at the same time and demonstrates that the transition to green growth is attainable. But this report also shows that many governments and stakeholders have yet to appreciate how procurement can be used to deliver on green growth. They overlook that public procurement touches a wide range of sectors, products and services and therefore can serve as a cross-cutting policy for delivering both economic and environmental value if developed and implemented with a revised mindset. It is most fitting that the Global Green Growth Forum has made procurement and private finance initiatives a core work stream and catalysed the Partnership for Procurement and Green Growth. I welcome the partnership and this report, and I hope it will serve as inspiration for everybody to green their procurement. Ida Auken Minister for the Environment, Denmark Procurement, Innovation and Green Growth 3 Introduction The world is increasingly faced with the challenges stemming from the need to sustain an expanding global population while simultaneously addressing the environmental pressures that could threaten our ability to accomplish this. Green growth has emerged as a strategy to balance the historically divergent priorities of achieving economic growth and social development without putting at risk the environmental systems and natural capital we rely so heavily upon. This approach emphasizes the environmental and economic gains achieved by reducing inefficiencies in the management of resources and the stimulation of new sources of activity through innovation and green market growth. Within the green growth framework, public procurement serves as a key policy tool for governments to drive the agenda forward and achieve shifts in market practices by leveraging its significant purchasing power and regulatory influence. As purchasers of a diverse range of goods, services and infrastructure to meet not only their own operational needs but also to deliver on their public service mandate, governments procurement spending represents scaled-up and long-term demand across a wide number of industries. Strategically directed, this demand has the ability to act as a market supporter and catalyst, incentivizing businesses to take the risks to invest, innovate and commercialize green products and services. A key to achieving this value-added green growth will come from boosting innovation so as to overcome inefficient patterns of the past and create new markets for the future. Government procurement must be considered an essential demand-side strategy for incentivizing and incubating innovation for green growth. This report builds on the existing body of work that supports the case for green public procurement, to further identify the linkages between procurement and green growth and discuss the enabling environment that would see public procurement serve as a trigger for green industrial innovation, expansion and growth. What follows is a brief discussion on the role of procurement within the green growth paradigm, where an introduction to key concepts is followed by feature case studies that present the varying experiences of industry and the public sector in applying procurement to achieve green growth aims. Finally, the paper concludes by offering observations on possible implications for policy and areas where further investigation is required to enable procurement to serve as a more potent trigger for green innovation and growth. This study was initiated by and undertaken at the level of the Partnership for Procurement and Green Growth, which is coordinated by the International Institute for Sustainable Development (IISD) and supported by the Global Green Growth Forum (3GF). Acknowledements CII–ITC Centre of Excellence on Sustainable Samuel Colverson Development, India Sustainable Built Environment National Research Confederation of Danish Industry Centre, Australia Copenhagen Cleantech Cluster Sustainable Purchasing Council Danish Ministry of the Environment— Swedish Environmental Management Council Environmental Protection Agency Tilmann Liebert Department for Business, Innovation and Skills, Tom Moerenhout United Kingdom The Greenroads Foundation EPEAT Thomson Reuters Government of Sao Paulo, Brazil U.S. Department of Energy Global Energy Basel Foundation U.S. General Services Administration International Road Federation U.S. Environmental Protection Agency Lawrence Berkeley National Laboratory United Nations Economic Commission for Europe Martin Dietrich Brauch UNEP/Wuppertal Institute Collaborating Centre on Oshani Perera Sustainable Consumption and Production Philips World Business Council for Sustainable Rijkswaterstaat—Dutch Ministry of Infrastructure Development and the Environment World Economic Forum 4 Procurement, Innovation and Green Growth Table of Contents Section 1: Procurement, Innovation and Green Growth ......................................................................................................................... 6 Procurement as a Green Growth Strategy ......................................................................................................................................... 6 The Business Case for GPP/SPP ............................................................................................................................................................ 8 Innovation for Green Growth Sachin Joshi, CII–ITC Centre of Excellence for Sustainable Development ........................................................................................ 9 Measuring Innovation ..............................................................................................................................................................................12
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