The Interplay of Climate Change and Public Financial Management: Greening Public Procurement
The paper The Interplay of Climate Change and Public Financial Management: Greening Public Procurement investigates the interlinkages between public financial management (PFM) and climate change by focusing on greening public procurement (PP). The research focuses on the role of the PFM environment in mainstreaming green considerations into public procurement to ensure government spending contributes to reductions in CO2 emissions. To this end, three features of the PP function are examined – its form of organization (degree of centralization), operation mode (e-procurement), and financial conduct (Life Cycle Costing methods). For this purpose, extensive desk research and interviews with relevant stakeholders in three selected case study countries (The Netherlands, Austria, and South Korea) were conducted.
Chart 5: Categories of countries regarding GPP implementation status.
Key implications of the report
The study first reveals that a certain degree of centralization is necessary to mainstream environmental considerations into the PP function and institutionalize GPP. Second, e-procurement is seen as an effective enabler for including horizontal policy goals, such as environmental considerations, in the PP function. Third, although LCC can be helpful, it is not considered crucial for greening.
The following key success factors for greening PP can be derived from this research: The GPP endeavor should be planned along with the various steps of administrative reforms. Merely applying tools without a proper implementation process will not lead to success. Any modification to the PP system should be addressed through a comprehensive change process inclusive of all relevant stakeholders and the whole supply chain. A shift in paradigm concerning greening PFM practice as a whole, allowing for climate-informed decision making, is necessary. This requires embracing a holistic approach and considering a greening of the whole PFM cycle by implementing measures that help generate information on negative environmental externalities caused by public sector activities as well as on the financial and other impacts of climate change on public finances.
A brief description of the research team
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.
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