Procurement, Innovation and Green Growth

The report argues that public procurement, representing a significant portion of GDP in many nations, can catalyze green growth by creating secure demand for sustainable products and services. It emphasizes that while incremental improvements are common, 'transformative change' is necessary to decouple economic growth from natural capital depletion. Through case studies in the US, Brazil, China, Denmark, India, and Vietnam, the document illustrates different approaches to Green Public Procurement (GPP), such as the EPEAT rating system for electronics and Denmark's use of output-based specifications. The report concludes that aligning procurement with R&D investment, adopting life cycle costing (LCC), and utilizing performance-based specifications are essential for triggering systemic green innovation.

• Public procurement represents a substantial portion of government budgets and national economies, ranging from 13 to 20 per cent of GDP in industrialized countries and reaching as high as 52 per cent in Ghana.
• The 'Sustainable Value Creation' framework identifies four levels of transition to a green economy: reactive, incremental, radical, and transformative. The report argues that incremental solutions are insufficient to address global challenges like climate change and population growth, and that 'transformative change' is the only strategy to create the value necessary for true green growth.
• The EPEAT green electronics rating system demonstrates how explicit government commitment to a green specification can create market demand and incentivize product redesign. By 2012, the system included nearly 50 manufacturers and over 2,800 unique products across 42 countries.
• In Sao Paulo, Brazil, the Sustainable Public Procurement (SPP) Program uses a 'Socio-Environmental Label' to signal sustainable goods. Between 2006 and 2010, the number of green jobs in the state increased by 27 per cent, from 690,854 to 878,837.
• China employs a hybrid-framework for GPP, utilizing centrally controlled lists—such as the Energy Saving Products list (covering over 30,000 products) and the Environmental Labelling Products list—to guide local procurement bureaus.
• Denmark's success in wastewater treatment modification is attributed to 'output-based specification,' where the government identifies a problem to be solved rather than stipulating a specific technology, leading to a reduction in pollution by 8090 per cent.
• India's GPP development is characterized by a unique public-private partnership where the Ministry of Environment and Forests collaborated with the CIIITC Centre of Excellence for Sustainable Development to develop product specifications for six key categories.
• Vietnam faces a 'missing procurement angle' in its green growth strategy; while it has laws for cleaner industrialization, it lacks direct green procurement policies and struggles with transparency and the lack of life cycle costing in tenders.
• Life cycle costing (LCC) remains underutilized globally despite its importance for environmental products. In the EU (2009-2010), purchasing price remained the dominant factor for tender evaluation across central, regional, and local government levels.

APA

Brauch, M. D., Perera, O., Colverson, S., & Moerenhout, T. (2012). Procurement, Innovation and Green Growth. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/procurement_innovation_green_growth.pdf

Chicago

Brauch, Martin Dietrich, Oshani Perera, Samuel Colverson, and Tom Moerenhout. Procurement, Innovation and Green Growth. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/procurement_innovation_green_growth.pdf.

Wikipedia

{{cite report |last1=Brauch |first1=Martin Dietrich |last2=Perera |first2=Oshani |last3=Colverson |first3=Samuel |last4=Moerenhout |first4=Tom |title=Procurement, Innovation and Green Growth |publisher=International Institute for Sustainable Development |date=2012 |url=https://www.iisd.org/system/files/publications/procurement_innovation_green_growth.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brauch2012procurement, author = {Brauch, Martin Dietrich and Perera, Oshani and Colverson, Samuel and Moerenhout, Tom}, title = {{Procurement, Innovation and Green Growth}}, institution = {International Institute for Sustainable Development}, year = {2012}, url = {https://www.iisd.org/system/files/publications/procurement_innovation_green_growth.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }