How to introduce mandatory green public procurement criteria

Over the last few weeks or months I have been reflecting on the inevitability of the need to address climate change leading to a significant change on the way things are done. That includes public procurement (to an extent) and in that context I think the time is right to set the stall of how best to do it and what traps to avoid. I will be doing so from a EU law perspective and Kirsi-Maria Halonen's excellent recent paper provides a good overview of the problem using a law and economics approach (available here on open access). In addition, I would say procurement can only contribute to combat climate change if it is part of a much wider change in public sector behaviour that goes well beyond what is being acquired. It cannot and should not be seen as an easy way to achieve climate goals without the rest of the public sector (and the wider economy) pulling their weight.

Public procurement is a means to an end, that is, buying something the public sector needs to fulfil its obligations. In of itself, it is complex enough. Over the years that has changed with a progressive increase in the 'pebbles' contracting authorities must carry while trying to use public procurement to achieve the ends they need to. If you look at the current crop of Directives, we have ever more exclusion grounds (which are irrelevant for the contracting authority), an obligation to comply with (some) environmental and social international instruments (Art 18(2) of Directive 2014/24/EU) and a lifecycle costing tool (Article 68) which may or may note be easy or helpful to use when awarding a contract. This is not exactly a fantastic starting point for mandatory green procurement but we are where we are.

Narrow and deep beats broad and wide

I'm a firm believer on a de minimis approach when introducing significant changes to a procurement framework and as such, if we are to include mandatory green procurement objectives we need to do so on a narrow (but deep) way. With this in mind, let's focus on why are we introducing mandatory green procurement objectives: the only reason to do so is to fight climate change. This is the only reason that justifies trying to change how procurement works and the more narrowly defined we are on the objective the more likely it is we can be successful without making procurement more complex than what is strictly necessary (yes, proportionality plays a part in here).

For me this is absolutely crucial because I fear the slippery slope this intervention would generate and the temptation of activists to make sure their pet interests (eg, social, 'fair tax', local objectives, industrial policy etc) to get their own ideas through the gap that is being opened to fight climate change. Therefore, the intervention really needs to pass the strict necessity test and to be designed in a way that discourages future 'pebbles' being added to public procurement. How do we do this then? I can think of five main ideas:

  1. Keep subject-matter link
  2. Mandate GPP yes, but only those with direct effect on climate change
  3. Maintaining a tech-neutral approach
  4. Pick measurable metrics
  5. Sunset/review clause

1.Keeping the subject-matter link and a tech neutral approach

Despite protestations to the contrary, (some) EU procurement rules have a clear logic behind them. Their overarching reason of existence is to achieve the internal market and not to make life easy for contracting authorities, enable great procurement or help the State achieve wider goals (more in a second). This is why the subject-matter link for award criteria and non-discriminatory technical specifications have remained the cornerstones of the EU's public procurement system. For all the importance in the world of climate change, that in itself, it is not a reason to change such a fundamental feature of the system and the risks of opening that particular Pandora's box are significant. Breaking that nexus and moving away from 'tech neutrality' even with the best intentions would make public procurement more complex, inefficient and complex. Crucially it would reduce the probability of actually achieving the goal mandatory green public procurement criteria ultimate objectives (reduce climate change that is). Complexity is the bane of any efficient public procurement system.

2. Mandate GPP yes, but only with direct effect on climate change

If we are to use public procurement to combat climate change, then whatever changes we make to the system have to be designed to achieve that exclusive outcome. In consequence, we can only mandate GPP in those circumstances where there is direct effect on climate change, for example in sectors like construction, energy and most goods it makes perfect sense to align procurement priorities with *directly* fighting climate change. As for other sectors, such as services in general it seems more difficult to use procurement as a tool to fight climate change. It is not that it would be impossible, but that it requires a lot more thinking about how to do so.

3. Maintaining a tech neutral approach

One of the risks of mandating green public procurement criteria is that we will fall into the temptation of picking winning technologies today, based on the information we have at the moment. That is the wrong way to go about it as we would be denying the benefit of development of technologies and knowledge. An example would be to mandate the use of specific renewable energies (say solar or wind) instead of determining that one is looking for energy which does not pollute. The first would forestall the deployment of other types of energy such as nuclear (even fusion), green hydrogen or say gas with carbon capture. What is relevant is to achieve the ultimate goal (getting us to net zero) and how procurement can achieve it, not to make procurement into a captive market for specific technologies.

The same can be said about electric cars. In some contexts they will be the right technology at the same time, in others they will not and it is possible that (green) hydrogen will have a part to play in greening transportation.

4. Picking measurable metrics

If it cannot be measured, it cannot be improved. This is surely an overused adage but one that fits well in the context of public procurement and one of the reasons why the adoption of MEAT criteria has been so poor and limited. Measuring beyond the price variable is incredibly difficult and more so when we are talking about a diffuse benefit (fighting climate change).

In consequence, work needs to be done in advance to define what measurable metrics are to be used by contracting authorities when using mandatory green public procurement criteria. By 'being done in advance' I mean outside each contracting authority because we cannot ask the thousands of contracting authorities in the EU each to solve this problem by themselves.

And if it cannot be measured, then it cannot be used as a mandatory green public procurement criteria as it will simply increase complexity and be a 'nice to have' which one should not force down the public sector simply because it is aligned with our belief systems.

5. Review/sunset clause

It is important to be honest about the costs of having mandatory green public procurement criteria, both in terms of the actual price paid for the works, products or services but also the added cost of undertaking procurement. It is relevant as well to acknowledge that the current information levels allows us to take some decisions and affordances in terms of what we think are the best ways to combat climate change and how to measure them. However, science and underlying facts keep evolving and we need to consider from the beginning implementing periodic reviews and a sunset clause. If we are successful, then perhaps in the future mandatory green public procurement will no longer be necessary and as such, it should come out of the legislation. Making it reviewable and with non-permanent would also provide a clear view on the exceptional nature of this measure and act as a deterrent for future attempts to add even more objectives to public procurement.