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This paper explores climate-friendly projects that could be part of the COVID-19 recovery while jump-starting the transition of the European basic materials industry. Findings from a literature review on technology options in advanced development stages for climate-friendly production, enhanced sorting, and recycling of steel, cement, aluminium, and plastics, are combined with insights from interviews with 31 European stakeholders in these sectors about the practical and economic feasibility of these technology options. Results indicate that with an estimated investment of 28.9 billion Euros, up to 20% of EU's basic materials could be produced through low-emission processes or additional recycling by 2025 with technologies that are commercially available or at pilot scale today. However, our stakeholder consultation also shows that in order to make these short-term investments viable, six main barriers need to be addressed, namely: (i) the lack of effective and predictable carbon pricing, (ii) the limited availability of affordable green electricity, (iii) the lack of a regulatory framework for circularity, (iv) low technology market readiness and funding, (v) the lack of infrastructure for hydrogen, CO2 and power, and (vi) the lack of demand for climate-friendly and recycled materials. Based on these insights, the paper proposes elements of a policy package that can create a framework favourable for investments in these technologies; these policies should ideally accompany the recovery package to give credibility to investors that the business case will last beyond the recovery period. Technologies for climate-friendly materials production, sorting and recycling can be supported as part of the recovery package but require an enabling policy framework. Combining continued free allocation with a Climate Contribution within the EU ETS can enhance economic viability of climate-friendly options. Project-based Carbon Contracts for Difference can eliminate carbon price uncertainty for climate-friendly processes. Auctions for publicly backed Contracts for Difference and Power Purchasing Agreements can guarantee price-stability of low-emission electricity. Green public procurement and public-private partnerships can provide infrastructure for hydrogen, CO2 and electricity while creating demand for climate-friendly materials. Revising regulations on product design and end-of-life emissions can improve sorting and recycling incentives. [ABSTRACT FROM AUTHOR]

We study how budget constraints affect effort provision in sequential elimination tournaments. Our main result is that the introduction of budget constraints has two opposing effects on the initial effort of the unconstrained contestants, and leads to a non‐monotonicity of this effort. This implies that if the budget asymmetry is not too large, total first‐stage effort from unconstrained contestants is larger than in the case with unconstrained contestants only. We also provide evidence that total first‐stage effort and total effort from unconstrained contestants might be larger in an asymmetric contest. [ABSTRACT FROM AUTHOR]

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We exploit a new dataset based on European Union (EU) procurement award notices to investigate the relationship between the degree of centralization of public procurement and its performance. We focus on the case of Italy, where all levels of government, along with a number of other public institutions, are involved in procurement and are subject to the same EU regulation. We find that (a) municipalities and utilities, which currently award among the largest shares of contracts, achieve lower rebates than other institutional categories; and (b) decentralization implies lower rebates only when it comes with weak competences of procurement officials. The evidence seems to suggest that a reorganization of the procurement system, both in terms of partial centralization and increased professionalization of procurement officials, would help improve award‐stage procurement performance. [ABSTRACT FROM AUTHOR]

This report estimates that government consumption and investment are responsible for at least 12 percent of German greenhouse gas emissions, mostly arising from the provision of public services and construction. Climate-friendly Green Public Procurement (GPP), which takes into account the carbon footprint of products and services in public tenders, can help reduce these emissions. Construction, and especially infrastructure, can be a main area for climate change mitigation through GPP. Yet the implementation of GPP practices in Germany is still limited and not focused on emission reduction. Based on a survey among procurement officials, this report shows that the main perceived barrier is the technical complexity of GPP combined with a low administrative capacity. Priority policy measures to overcome these barriers include triggering political commitment to GPP at the local level, enhancing specialized procurement capacities, and strengthening the provision of assistance to procurement authorities, for instance through competence centers on sustainable procurement. [ABSTRACT FROM AUTHOR]

Copyright of Deutsches Institut für Wirtschaftsforschung: DIW-Wochenbericht is the property of DIW Berlin and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Public authorities spend large proportions of their GDP on goods and services and are therefore responsible for a significant share of embedded emissions. Given this large impact, governments have the responsibility of decarbonizing their purchases, as well as the potential to influence markets towards sustainability. So-called 'Green Public Procurement' (GPP) consists in the use of environmental criteria in the procurement process. In Germany, Europe's biggest economy, public purchases account for 15 percent of annual GDP. However, despite a rising trend, the use of GPP in public procurement contracts remains marginal. The main barriers to broader implementation is the perception that including environmental criteria leads to higher procurement costs. Further, administrative capacity faces constraints to acquire legal and technical expertise about GPP. A clear political mandate for financing the incremental costs incurred from the environmental impact of procured goods and services, as well as specific training programs for procurement officials can encourage an increased adoption of GPP in the future. [ABSTRACT FROM AUTHOR]