The green transition and competition in public procurement

Abstract Over the last decade, the European legislation on public procurement has been clarified to facilitate green public procurement. Traditionally best value for money has been the main goal of public procurement, while new regulations have increased the scope for secondary goals such as environmental policy. We investigate how the secondary goal of greener public procurement has affected output of public tenders. Using the TED database, we investigate whether environmental criteria in public contracts are associated with a lower degree of competition. Exploring French public contracts between 2017 and 2019 for the largest cities and metropolitan areas, our results show that the introduction of a green criterion in the public procurement notices is associated with a reduction in the number of firms participating in the competitive tenders. Award prices also appear higher, both because of reduced competition and, more directly, because of environmental criteria.