Green Public Procurement: Interplay of PFM systems
with Climate Change
Video Recording of the Event:
Green public procurement (GPP)—investing government purchasing power in environmentally friendly public goods, services, and works—is a key tool for Governments to tackle climate change. GPP not only contributes to decarbonizing government organizations and operations, but can also create incentives and new markets for sustainable products and processes, boosting demand for green technologies in a wide range of sectors, from transport to construction.
GPP is an operational function of the government. As such, its success or failure is likely to depend on the wider institutional strengths and weaknesses of the public sector. In particular, GPP is an element of budget execution; it is an important subsystem in the wider PFM cycle. However, these wider institutional elements that are critical for GPP to succeed, have not been widely researched or discussed.
The objective of this virtual knowledge event was to discuss the key elements and characteristics of the PFM system as a whole that need to be present for an effective and efficient GPP. The event presented the findings of the paper “The Interplay of Climate Change and Public Financial Management: Greening Public Procurement” to stimulate discussions of how GPP could be more effectively placed in its wider PFM institutional contexts.
The paper was a product of the PEFA-sponsored Research Competition that focused on exploring the intersection of PFM and climate change. The research was done by the research team at the Institute of Public Management of the Zurich University of Applied Sciences, which included Antonia Ida Grafl and Alma Ramsden.
Few messages from the discussion during the event:
- Green Public Procurement (GPP) is often seen mainly as a legal matter – but a wholistic change approach in PFM is needed from taxes, budget execution to procurement in order to address the implementation gaps in greening public finance.
- The biggest obstacle for GPP implementation is the high perceived cost of green goods and services in the short-run. Political commitment and direction is critical to deliver cost-effectiveness in the medium-term.
- More awareness and practical skills is needed by the procurement authorities as well as the private sector on the green concepts, as some countries still struggle with the capacity to implement standard procurement systems effectively.
- To ensure there is a market for green public procurement, building awareness and incentivizing the private sector is particularly important.
- More robust and meaningful monitoring and accountability over green public procurement is critical, but auditors also need to understand how GPP works and what are the benefits.
Antonia Ida Grafl: Antonia is a Senior PFM Expert at the Institute of Public Management of the Zurich University of Applied Sciences. She focusses on greening PFM, capacity building and financial communication in the public sector. Antonia has 15+ years of professional experience in PFM, public sector management and political economy. She served in supervisory, advisory and managerial capacities in several public sector institutions including the Austrian ministry of Finance, and the World Bank.
Alma Ramsden: Alma is a Project Manager and Lecturer at the Institute of Public Management of the Zurich University of Applied Sciences. She is an economist with a research focus on sustainability, finance and education in the area of public policy. She has obtained a Ph.D. in Economics and Finance at the University of St. Gallen. She has worked several years as a policy advisor for government agencies and NPOs, conducting evaluations and empirical economic research.
Research Team Presentation: Green Public Procurement: Interplay of PFM systems with Climate Change
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