WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

Vera Danilina

Green Public Procurement (GPP), or green purchasing, entered the global agenda in the early 2000s while the majority of national programmes was launched already ten years earlier. Their implementation discloses a wide range of contradictory economic consequences. Our research is focused on the GPP welfare effects in autarky and upon trade integration across eco-heterogeneous countries. We introduce the public procurement analysis approach into the heterogeneous firms setting aiming to model the life-cycle based GPP programmes that account for the environmental quality of the whole production process. The designed framework shows the collateral effect of green purchasing based on the resources redistribution across industries and average productivity changes. It also allows to study the welfare effects conditionally on the type of the GPP policy in closed and open economy settings. Our research contributes to a relatively scarce literature on environment and trade with heterogeneous rms proposing a  new approach to the GPP modelling. The paper also provides a set of policy recommendations that can be of particular interest due to the development of eco-labelling and environmental standards, and corresponding GPP programmes.