Abstract

The People’s Republic of China spent more than CNY 1.6 trillion (USD 252 billion) on procurement in 2013, accounting for 11.7 per cent of all national spending (Ministry of Finance of the People’s Republic of China, 2014). In light of these numbers, the potential environmental, social and economic multipliers of greening government purchases become evident. The benefits of a comprehensive and efficient green public procurement (GPP) policy are not limited to the green products and services the public sector buys, but will have a ripple effect that encourages green consumption nationwide. The significant purchasing power of the government will provide the much-needed incentives in order for businesses to invest and innovate in green products and services to meet the government’s guaranteed long-term and high-volume demand. Additionally, GPP is in line with China’s national plans to pioneer “eco-civilisation” and with the upcoming

13th Five-Year Plan (FYP), which underlines the importance of GPP. This paper is the second and final component of IISD’s contribution to greening public procurement in China. Our discussion paper Green Public Procurement in China: Quantifying the Benefits, published in April 2015, analyzed China’s GPP landscape, taking a closer look at current practices, actors at different levels of government and the underlying legal framework. In addition, the paper introduced the IISD GPP Model, discussing its potential for quantifying and communicating the benefits of GPP, while providing a high-level overview of the modelling approach used and of the scope of the model envisioned.

Building on the results of the IISD GPP Model, consultations with stakeholders and an extensive literature review, this paper provides targeted recommendations addressing the development areas identified to improve GPP in China. The recommendations follow a multiphase approach offering more immediate solutions as well as more ambitious, larger-scale overhauls of the GPP framework for the long term.

The results of the IISD GPP Model will be shared for the first time as part of this paper, making the case for green procurement through analyzing five product categories: air conditioners, lighting, cars, paper and cement. These categories were selected because they represent significant financial flows in procurement, have notable environmental impacts and domestic production, and have sufficient data available to facilitate their analysis. A detailed overview of the key elements of the modelling approach will be provided, in addition to an explanation of the model setup and the range of externalities monetised for each product category. Finally, we will look at how to use the model at the different levels of government as well as how its scope can be extended and customised in order to leverage its potential under a wider range of circumstances and areas of procurement.