Green Procurement: the pathway to reduce emissions
The Paris Agreement has set a strong global ambition to reduce greenhouse gases. This ambition is now being integrated into policy by European governments. Part of this includes paying close attention to everyday actions and particularly, investments.
In the EU, public procurement is accounted for an estimated 16% of GDP (€1.8 trillion annually). The things governments tend to procure (like large infrastructure such as roads, buildings and railways, or resources for daily services such as public transport and energy), account for a huge percentage of CO2 emissions. In fact, the construction sector alone accounts for 35% of CO2 emissions in Europe – especially through the materials used, such as cement, steel and asphalt. In particular, cement globally accounts for 5% of CO2 emissions.
In order to make our planet greener, we can use procurement as a strategic and effective tool to help shape how governments invest their money and our money.
Many governments around the world have already realised this, and will try leverage the money they invest in such large contracts to achieve certain desirable goals. This includes, for example, investing in a new large infrastructure project for which they encourage the use of less cement, or raw resources available locally, rather than shipping them in. The same logic can apply to any kind of investment that would reduce the negative externalities on the environment.
“Low carbon procurement in infrastructure can reduce CO2 emissions by 10-20%, the equivalent of taking 40 million cars off the road in NorthWest Europe.” – Dr. Sebastiaan van Herk
In order to realise this potential, a series of policy frameworks such as the European Commitment to Green Public Procurement have been developed. We have also been working on green procurement since 2007, so that procurers can collaborate to combat their common challenges and work towards a greener future.
Together with the Dutch Ministry of Infrastructure and Water Management, we are currently setting up a project called the Power of Procurement (PoP). PoP brings together big buyers in North West Europe, a region responsible for 50% of total emissions in Europe. We are currently in dialogue with, e.g. Deutsches Bahn, ProRail, Agentschap Wegen en Verkeer, UK Environment Agency and Highways England,
Power of Procurement aims to take Green Procurement one step further.
Government procurement is serious business. They involve complex negotiations with a wide range of stakeholders, often involving millions of euros of taxpayers’ money. The projects that get built also provide us with homes to live in, or the underlying infrastructure we all rely on to travel around efficiently and safely.
Many procurement initiatives therefore arrive at a difficult decision: how do we change our already complex decision making process to facture in environmental sustainability? Often, the quality of products or service being bought and the value for money taxpayers are ‘must haves’, with additional green impacts being ‘nice to haves’.
PoP tackles this problem by helping governments turn environmental considerations into something quantifiable, combining (SKAO’s CO2 Performance ladder, the Sustainable Asset Valuation Tool by IISD and DuboCalc of Rijkswaterstaat).
PoP singles out CO2 emissions, and brings together full life cycle CO2 measurement, advanced scenario modelling and innovations in contracting to underpin green procurements that make sense economically.
For example, when a government decides to buy a large road network, they could ask all potential providers to not only propose a design, plan and price, but also for a full lifecycle CO2 assessment. The government can then model a series of alternative possible outcomes and make a detailed comparative assessment, in terms of quality, price and CO2.
For governments, this means they can make a strong business case for buying green – providing hard data that a potentially higher upfront cost will result in a more sustainable and even economically viable asset. An asset, whether a highway or fleet of trains, is more valuable if it produces less CO2 – particularly with carbon tax on the horizon. In other words, accurate full lifecycle CO2 analyses can help convince investors that it is worth buying into a green, and thus more bankable asset.
For suppliers and contractors, clear CO2-sensitive contacting offers a clear incentive to innovate, as their hard work to reduce CO2 in their supply chain will make them more competitive and gain access to real opportunities.
We firmly believe PoP will open up new avenues for governments in North West Europe to go from the highest CO2 producing region in Europe, to global pioneer of achieving the Paris Agreement’s challenging ambitions.
Government innovation specialist Claus Mullie, Climate and Public Policy Consultant Jesse Renema and Bax & Company Partner Dr. Sebastiaan van Herk are facilitating this exchange of knowledge, by giving partners a safe environment for them to discuss, decide and act.
As well as experience in green procurement, our team of innovation experts and consultants with expertise in co2 reduction are helping to green our planet in other projects: BEGIN, where blue-green infrastructure is implemented through social innovation and Carbon Connects, where the power of water is used to re-wet dry peatlands, to prevent the release of CO2 (as land use is the biggest emitter of CO2).
“Green procurement is proving to be a promising pathway to reduce emissions and stimulate innovations.” – Dr. Sebastiaan van Herk