The United States government has a pivotal chance to drive market demand for green technologies and services through its procurement processes, which exceed $630 billion in annual spending. This enormous purchasing power represents a significant opportunity to promote environmentally responsible products and services.
By implementing a robust green procurement program that incentivizes the acquisition of goods and services that have minimal environmental impact, the U.S. could make meaningful strides toward achieving its climate ambitions while fueling the growth of domestic green industries.
However, the current procurement framework faces substantial barriers that hinder green innovation. Various agencies have different standards, and the bureaucratic processes can be convoluted and challenging, especially for small businesses trying to navigate them. The World Economic Forum has highlighted that outdated procurement practices limit flexibility and innovation, often over-prioritizing cost-effectiveness while creating unnecessary administrative layers in the procurement process.
Recognizing the urgent need for reform, the U.S. government can lay the groundwork for clearer standards in green procurement tenders. In recent years, although some efforts were made to create a legal framework for green public procurement, advancements were rolled back during President Donald Trump’s administration. For example, Executive Order 14057 aimed to position the U.S. government as a leader in advancing a net-zero emissions economy by 2050 through green procurement—but this was compromised after the change in administration.
Fortunately, despite previous policy setbacks, opportunities still exist to enhance U.S. procurement strategies. By building upon the World Trade Organization (WTO) Government Procurement Agreement, the U.S. could modernize federal practices and showcase leadership in global green procurement. Congress could play an instrumental role by revising procurement laws, ensuring their effective implementation, and allocating funds specifically for green procurement initiatives.
Such advancements would not only streamline green practices and fuel innovation but also align with climate goals, ultimately enhancing the competitiveness of American industries in the rapidly growing global green economy. Additionally, U.S. procurement could set elevated standards for domestic purchases, strengthening local manufacturing and technological innovation.
Adopting rigorous green procurement practices would usher in the adoption of sustainable technologies by sending strong demand signals to the private sector. This, in turn, would spur advancements and boost competition within the domestic market for new technologies. Bundling research and development contracts with production contracts has shown the potential to attract investments in critical technological sectors.
Implementing high standards for green procurement that are competitive and accessible could stimulate increased investment in cutting-edge green technologies, helping American companies to better compete internationally. The U.S., leveraging its substantial market share, has the potential to set up global green procurement standards that favor its clean firms.
For instance, adopting minimum standards for purchasing products and services with low embodied emissions—such as climate-resilient infrastructure and clean vehicles—could motivate other jurisdictions to follow suit in their green transitions. This dynamic would create broader economic opportunities for American firms and promote the global spread of U.S. technologies and know-how.
By refining U.S. procurement processes in alignment with global trade rules, the U.S. can gain a competitive edge, particularly against players like China, without alienating its allies in the global market. Moreover, enhancing green procurement could bolster U.S. competitive advantages via indirect procurement practices which would push firms holding government contracts to prioritize greener suppliers.
Although the U.S. manufacturing space faces fierce competition from China’s industrial sector, which has a growing fossil fuel footprint, American processes are comparatively more environmentally friendly. As reported by the Climate Leadership Council, for every dollar of U.S. industrial output, only one-third the amount of greenhouse gases are emitted than in China.
Despite these advantages, there are still substantial challenges to implementing a comprehensive green procurement framework. These hurdles stem primarily from the lack of coherence in standards and the potential disharmony between regulations and goals. The political climate has also complicated efforts, particularly highlighted by President Donald Trump’s administration’s approach to climate and environmental regulations.
Multiple layers of procurement processes at local, state, and federal levels only exacerbate the fragmentation, signaling a need for greater uniformity. Streamlining regulations, as called for by Executive Order 14275, aimed to simplify the procurement system while promoting a more agile federal approach. By alleviating bureaucratic burdens, federal agencies can drive forward procurement processes that encourage green innovation.
Yet, it is clear that current initiatives lacking coordination and efficacy have turned out to be inadequate against the backdrop of pressing environmental concerns. For instance, the Environmental Protection Agency’s (EPA) Environmentally Preferable Purchasing program was established but faltered due to its failure to create a centralized data collection system and lack of awareness among agencies.
The introduction of buy-clean initiatives, featuring benchmarks for carbon emissions and low-impact materials, had the potential for success in early stages but was rescinded—leaving substantial gaps in the procurement ecosystem. Effective collaboration and coordination at federal, state, and local levels will be essential in creating an environment that champions green practices.
Another pressing risk involves potential misuse of new rules that might miss their mark. For instance, green procurement policies could unintentionally lead firms towards greenwashing—making superficial claims about environmental responsibility to win tenders without genuinely adopting cleaner practices. The Biden administration’s initiative concerning steel purchasing requirements highlighted these complexities when prioritizing unionized production over cleaner manufacturing methods. It inadvertently raised questions regarding whether the policy emphasized low-carbon output or labor considerations. This imbalance illustrates the necessity of evaluating projects based on their actual environmental impacts and the potential to revise future procurement tenders accordingly.
Moreover, international collaboration in procurement is vital to developing synergies that would streamline access to foreign markets for U.S. green firms. As countries explore various frameworks to boost their own greener procurement practices, including Canada’s low-carbon standards and unilateral efforts by other nations, the U.S. should reinforce its commitment to international cooperation, having previously engaged in a bilateral relationship with the EU that now appears to be faltering.
In global procurement, the WTO Government Procurement Agreement offers a framework for harmony with its premise of transparency and fairness. Formed with 22 parties representing 49 countries—including many U.S. allies—the agreement has broadened access for American industries and promoted the diffusion of U.S. technology. Although the GPA does not focus specifically on green factors, members can incorporate environmental considerations into their tender assessments.
The ongoing Work Program on Sustainable Procurement within the GPA presents an opportunity for the U.S. to spearhead discussions around applying and refining green procurement standards based on best practices. If the U.S. were to take decisive action towards leading these conversations at the WTO, it could foster an environment of mutual collaboration among strategic trading partners, ensuring American interests are prioritized in the development of future trade norms.
Moving forward, the U.S. should embrace the chance to innovate both domestically and globally through enhanced green procurement practices that stand to benefit American firms and lead the way towards sustainable economic futures. If the U.S. dismisses environmental priorities in the coming years, it risks losing its stake in the rapidly evolving global market. Data suggests that the transition towards green industries is gaining momentum worldwide, positioning the U.S. at risk of falling behind in market share as competition heats up.
One promising sector poised for growth includes steel manufacturing. The Steel Manufacturers Association has emphasized that the U.S. leads in low-emission steel production and can leverage this advantage to bolster national manufacturing efforts. As the demand for green technologies surges, it is essential to not overlook actions that could be implemented both in the U.S. and across international contexts to ensure firms capitalize on burgeoning economic opportunities.
For successful facilitation of a green procurement framework, the U.S. government needs to undertake several strategic actions: 1. Define a set of best practices for green procurement at the national level, encouraging local governments to adopt higher standards where applicable.
2. Develop baseline national standards for green procurement that allow for flexibility and local enhancement.
3. Ensure adequate staffing and resources are in place to assist companies in understanding procurement processes and requirements.
4. Collaborate with WTO Government Procurement Agreement signatories to forge common guidelines in green procurement efforts.
By integrating these domestic and international actions, the U.S. can stimulate the creation of sustainable trade and procurement markets while empowering American firms that invest in innovative green technologies, ultimately paving the way for a more sustainable future.
image source from：cfr
