The discussions at COP 29 highlighted that Green Public Procurement (GPP) is not just a policy tool but a critical lever for achieving broader climate goals through stimulating demand for greener products (UNFCCC, 2024). GPP is a practice where governments and central authorities prioritize procuring goods and services that minimize environmental impact throughout their lifecycle (EPA). This article examines GPP in India, where public procurement constitutes approximately 20 per cent of the GDP (Ministry of Finance, 2019). This provides vast potential for GPP for sustainable economic development and influences the nation's environmental footprint.

Early Initiatives and the Draft Public Procurement Bill (2012)

The introduction of GPP in India was seen when the government presented the Draft Public Procurement Bill 2012. This bill mandated the integration of environmental considerations into public procurement processes. By embedding environmental impact assessments into procurement decisions, it tried to align India's public spending strategies with its broader environmental objectives, fostering sustainable development through responsible resource allocation. India has previously attempted to reduce harmful environmental impact through prior initiatives such as the Ecomark Scheme in 1991. The Ecomark Scheme focused on labelling products that meet environmental criteria for consumers. Another initiative was the Standards and Labelling Scheme, which focused on energy efficiency. Neither initiative greatly impacted the nation's environmental footprint; both found limitations surrounding nationwide adoption, scale, and implementation issues. Subsequently, in 2018, the transition towards public procurement was initiated by establishing India's Task Force on Sustainable Public Procurement (Ministry of Finance, 2020). This task force is responsible for drafting a plan for the future implementation of GPP and for observing global practices while simultaneously assessing India's current status of GPP. By learning from international practices and altering them for an Indian context, the task force aims to build a framework for sustainable public procurement in multiple sectors. International experiences with GPP vary from voluntary standards of the EU to eco-labels environmental certification by the US and incorporating lifecycle costs in the case of Germany (TERI, 2024).

Focus on Steel and Cement Industries

Public procurement in India is currently heavily seen in the steel and cement industries, which are crucial for infrastructure development (RMI, 2024). Additionally, these sectors have a great impact on greenhouse gas emissions. The enhancement of GPP can significantly impact emission reductions in these specific industries.

Impact of Carbon Border Adjustment Mechanism (CBAM)

Another interesting point to consider is the implication of the Carbon Border Adjustment Mechanism (CBAM) on GPP. The EU has already introduced CBAM, in which tariffs are imposed on imports based on their carbon footprint.  This mechanism will take effect in 2026 and has sparked considerable debate about its implications for global trade and climate equity. Through CBAM, a nation can promote cleaner practices in global trade. India can leverage its GPP initiatives to mitigate the impacts of CBAM while advancing sustainability. By prioritizing low-carbon materials in public procurement, India can comply with international standards and stimulate domestic markets for green technologies. This alignment could help reduce emissions in key sectors like construction and manufacturing (RMI, 2024).

The potential of GPP implementation is particularly significant in the steel and cement industries. These industries are also likely to face a significant impact of CBAM. They are primary sources of greenhouse gas emissions, and reducing carbon output from environmentally friendly practices will greatly impact India's overall ecological footprint. Therefore, with the implementation of GPP, the steel and cement industries have the potential to lead the nation in shifting the market to environmentally conscious production practices.

Encouraging Private Sector Participation Through Public Procurement

India's government could also set a strong example for the private sector by using green products and technologies in public procurement, which could expand the private sector's market for environmentally friendly products. For GPP to be successful in India, there must be a unified effort to embrace environmental concerns in public procurement. We can look to low-carbon technologies and materials for public construction projects as an example of potentially reducing India's environmental footprint. In addition, India's demand for green products will grow and provide more demand for suppliers to create and adopt sustainable practices. Erizaputri and Bechauf (2024) recommend strengthening the policy framework, building awareness and skills for GPP, developing and scaling up GPP tools, and establishing robust monitoring mechanisms.

GPP holds the potential for sustainable economic growth. Notwithstanding the challenges (RMI, 2024), if India integrates environmentally conscious practices into public procurement, India will be able to make progress towards its carbon neutrality goals. Effective implementation of GPP will demand a united effort across various sectors and government bodies (Erizaputri and Bechauf, 2024), along with adopting initiatives such as the Ecomark Scheme and the Standards and Labelling Scheme. Along with transparency efforts, such as GeM, the government can promote environment-conscious practices and shift the market towards sustainable production.

Way Forward

Going forward, GPP will be essential for India's commitment to its environmental goals and sustainability objectives. If India spearheads the global idea to prove that economic growth and environmental degradation are not mutually exclusive, India's economy will be able to grow because of environment-conscious practices. GPP is a necessary first step towards establishing a greener future and will allow India to showcase its commitment to sustainability and environmental responsibility. Implementing GPP as a standard practice in India would ensure the nation can compete globally while simultaneously fulfilling its environmental responsibilities.

References

Erizaputri, S and R Bechauf (2024) Green Public Procurement in India:  Progress, challenges, and opportunities. December 2024. IISD.

Ministry of Finance (2019) FM Reviews Capital Expenditure & Payments of Maharatnas and Navratnas CPSEs. Ministry of Finance. Retrieved from Press Information Bureau: https://pib.gov.in/PressReleasePage.aspx?PRID=1586546

Ministry of Finance (2020) Task Force on Sustainable Public Procurement. Link: https://doe.gov.in/files/circulars_document/Task_Force_on_Sustainable_Public_Procurement.pdf

MoEFCC (2023) Ministry of Environment, Forest and Climate Change. Notification issued for Green Credit Program (GCP) and Ecomark scheme Under LiFE Initiative to Promote Sustainable Lifestyle and Environmental Conservation. 13 OCT 2023 6:52 PM by PIB Delhi. Link: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1967476#:~:text=design%2C%20process%20etc.-,The%20Ecomark%20Scheme%2C%20notified%20on%2013th%20October%202023%2C%20replaces%20the,and%20protection%20of%20the%20environment.

RMI (2024) Unlocking the Potential of Green Public Procurement in the Indian Economy. A report. https://rmi.org/insight/unlocking-the-potential-of-green-public-procurement-in-the-indian-economy/

The Energy and Resources Institute. (2024). Green Public Procurement for Advancing Sustainable Development in India: Policy Nudges for Promoting Sustainable Consumption and Production. SDG Charter, Act4Earth and World Sustainable Development Summit. New Delhi: The Energy and Resources Institute.

The Public Procurement Bill. Bill No. 58 of 2012. As Introduced in Lok Sabha. https://sps.iitd.ac.in/PDF/PPB.pdf

UNFCCC (2024) COP 29 Declarations and Pledges Letter. Link: https://unfccc.int/documents/641509 #