Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 912: Using public procurement to implement environmental policy: an empirical analysis

Sofia Lundberg (), Per-Olov Marklund (), Elon Strömbäck () and David Sundström ()
Additional contact information
Sofia Lundberg: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Per-Olov Marklund: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Elon Strömbäck: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
David Sundström: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden

Abstract: Politicians expect green public procurement (GPP) to serve as an environmental policy instrument. However, in order for GPP to work as an effective policy instrument, it is important to take into consideration potential suppliers’ decisions to participate in the procurement process, the total number of bidders, and the screening of bidders with respect to mandatory green criteria. The aim of this paper is to empirically study GPP in this respect. The analysis presented here is based on data from Swedish cleaning service procurements that are unique in that they contain very detailed information on various environmental standards set by the contracting authorities. We find at best only a weak effect on supplier behavior, and this suggests that the use of GPP in this situation does not live up to its political expectations.

Keywords: Auctions; Compliance cost; Degree of Competition; Endogenous entry; Objective effectiveness

JEL-codes: D44; H57; Q01; Q28

34 pages, September 15, 2015

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http://www.usbe.umu.se/enheter/econ/ues/ues912/ PDF-file

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