Sourcing Sustainably: Encouraging Greener Steel, Cement, and Natural Gas

Every level of government in the United States, from federal agencies to city councils, buys products from the private sector. Green public procurement programs, which focus on sourcing products that are better for the environment than traditional offerings, offer a way to improve sustainability and stimulate green product innovations.

But generally, green public procurement programs do not include basic materials like cement and steel, which make up a large share of industrial carbon emissions. Natural gas seems to never be included in these programs, even though its value chain has significant methane emissions and produces CO2 when burned. A new report from Resources for the Future describes what programs geared towards these materials may look like, and how public programs can be successfully implemented.

“Reducing greenhouse gas emissions from natural gas, cement and steel will require a combination of many types of policies, including carbon taxes, tax credits, research and development programs, and others,” Alan Krupnick, RFF Senior Fellow and report author, said. “Green public procurement is a more modest, politically palatable and, from the industries’ perspective, voluntary way to move industries along greener paths.”

Key Findings

• Expanding green public procurement programs to include materials and fuel with large CO2 and methane emissions could create market incentives for producers and encourage innovation and best practice.
• The most important drivers for a program’s success are the design, funding, industry engagement, policy strength, staff, and leadership commitment.
• The perception that environmentally friendly products are more expensive than traditional ones is a major barrier to green procurement programs. Another significant barrier is the lack of implementation expertise for procuring green materials (such as cement and steel) for buildings, roads, bridges, and vehicles. Still, governments in Europe and, very recently California, are moving down this path, with the federal government poised as well.
• Design decisions on green standards, certification bodies and processes, as well as tools for firms to calculate their carbon footprint are critical to program success.
  
  

This report provides a comprehensive look at the state of green procurement programs, as well as where they have room to grow. As a new presidential administration prepares to take office in January, the report’s findings could have implications for federal government procurement initiatives for these materials.

A live digital event unpacking the findings in this report and featuring experts in green procurement will be held in early December. To learn more about green procurement programs from those closest to the issue, be on the lookout for an invitation, or keep an eye on RFF’s Events page.

For more information on these findings, read Green Public Procurement for Natural Gas, Cement, and Steel by RFF Senior Fellow Alan Krupnick.