Buying Green: Government Procurement as an Instrument of Environmental Policy
- 1 May 1997
- journal article
- research article
- Published by SAGE Publications in Public Finance Review
- Vol. 25 (3), 285-305
- https://doi.org/10.1177/109114219702500302
Abstract
Governments often favor environmentally superior products in procurement, even if Abstract they cost more than alternatives. This article analyzes the effects of such green procurement policies. If marginal production costs are increasing, private market responses counteract changes in government purchasing (crowding out), thus reduc ing policy effectiveness. If significant scale economies exist, however, then private responses may reinforce changes in procurement. Procurement policies change both the market shares of brown and green products and total production. Whereas the changes in market share usually reduce environmental costs, the changes in total production can go either way. As a result, there are circumstances in which green procurement policies increase environmental costs.Keywords
This publication has 3 references indexed in Scilit:
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- Government procurement and international tradeJournal of International Economics, 1989
- The impact of government price discrimination and its equivalence with the tariffReview of World Economics, 1982