New Research Shows China Could Reap Significant Benefits by Scaling up Green Public Procurement

BEIJING—20 April 2015—First-of-its kind modeling by the International Institute for Sustainable Development demonstrates the significant environmental, social and economic benefits that China could achieve by leveraging the huge sums involved in public spending.

Today IISD  launched a report titled “Green Public Procurement in China: Quantifying the benefits” at an event co-hosted by Chongyang Institute for Financial Studies (RDCY) and its Eco Finance Center, and attended by leading Chinese and international experts.

IISD presented the initial results of its modelling work under its China Green Public Procurement project for the first time to the public. “Our custom-developed model clearly shows that there are huge benefits for China to reap if it practices more ambitious green procurement,” said Oshani Perera, IISD’s director of public procurement and infrastructure finance. The model analyses major areas of spending by the Chinese public sector and shows that significant benefits could be achieved by preferring products and services with a lower environmental impact. These benefits include:

• Reduced air pollution and greenhouse gas emissions
• Reduced health costs
• Green jobs
• Energy savings
• Green economic development and competitiveness

Government spending alone accounted for more than RMB 1.6 trillion in 2013, representing 11.7 per cent of national spending. “Public procurement is a powerful lever for governments to transform markets. Fully harnessing green procurement would promote tangible progress toward eco-civilization,” said Dr. Wang Wen, Executive Dean of RDCY, a partner in the project.

In order to make it happen the report provides a set of preliminary conclusions. These include:

• Increasing the share of green procurement of total procurement
• Increasing the stringency of requirements to qualify as green procurement, and more regular updates of product lists
• Making procurement of products on the Environment Labelling Products List mandatory, as is already the case for products on the Energy Conservation Products List
• In the longer term, moving from the ‘lists-approach’ toward performance-based specifications, where products are procured based on well they satisfy previously established public needs (such as specifying the amount of light required for an office space rather than the type of lighting to be bought as traditional procurement would foresee)
• Further progress based on the encouraging current legal reform: build a mature legal framework that removes ambiguity for green procurement and harmonizes the Bidding Law and the Government Procurement Law. This would contribute to legal certainty for state-owned-enterprises to practice Green Procurement.
• More broadly, combining top-down regulation with bottom-up feedback of local needs and constraints where procurement takes place

The project is supported by the Swiss non-partisan MAVA Foundation for Nature. IISD has signed cooperation agreements with the China Environmental United Certification Center of the Ministry of Environmental Protection, the government body promoting the procurement of environmentally friendly products, and Top10 China which promotes the procurement of energy efficient electrical and electronic products.

Green Public Procurement in China: Quantifying the benefits (Discussion Paper) is available here: http://www.iisd.org/library/green-public-procurement-china-quantifying-benefits-discussion-paper

Public-Private Partnerships in China: On 2014 as a landmark year, with past and future challenges (Discussion Paper) is available here:

For more information, contact Tilmann Liebert at tliebert@iisd.org