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How joint procurement could cut green prices

It is simple economics that the higher the demand for a product the lower the price will be. Any new product being introduced to the market needs to quickly increase demand in order to achieve a return on developmental costs and realise economies of scale. The combined purchasing power of several public authorities working together can effectively provide this demand, and give new, "greener" products the helping hand they need on the market.

For local authorities, the benefits of joint procurement are not limited to lower prices for their products and services. Other benefits include:

  • Substantial savings can be made through reduced administrative costs by combining actions
  • Pooling the skills and expertise of participating authorities in both procurement and the environment
  • Lowering costs through joint procurement can be a good entry door to convincing others in your organisation to consider sustainable procurement in a more systematic fashion

The impact of public authorities acting in unison to drive the market is perfectly illustrated by the impressive success achieved in the US, where a Federal obligation for all computers purchased by federal departments to be Energy Star compliant, led to a situation now in which virtually all PCs sold on the market are compliant without price increases. In another example, the eight European cities involved in the ZEUS project used their combined purchasing power to put into operation more than 1000 zero and low emission vehicles and a wide range of alternative fuels, and thereby enjoy substantial economies of scale.

Furthermore, despite the internal market, the price of many products still varies considerably between different European countries, as does product availability. Joining procurement actions across national borders can both ensure that the lowest price is available to all, and that a wider range of products is offered.

Two rounds of pilot joint procurement actions have taken place within the LEAP project. The first of these was finally carried out in the UK, and focused on non-toxic cleaning products and TFT monitors in the UK). To read the report please click here (pdf). Also see the annexes here (zip file).

The second activity involved consortia of local authorities in Greece, Spain and Portugal setting up national joint procurement actions for the purchase of recycled paper, with impressive results. Activities were also carried out in the UK, exploring the market for biodiesel. To view the final report click here (pdf).

Building on the pilot activities within the project, a tool has been developed presenting different models for organising joint procurement and can be viewed here (pdf).

 


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