156. Governments can also modify price signals by adopting sustainable public procurement policies. Governments are the largest consumers in an economy. On average, the public sector spends between 45 and 65 per cent of its budgets on public procurement. This amounts to 13 to 17 per cent of GDP in high-income countries and even more elsewhere. This spending can be used to set specific social and environmental standards for products and services purchased and can provide a sufficiently large market to enable economies of scale.

157. Recent successes in the use of sustainable public procurement have demonstrated that Governments can exert a major influence on the private sector, encouraging businesses to invest in new product development, reshape their value chains and build markets for new products outside the public sector. One illustration is the mandatory policy on green product public procurement of the Republic of Korea (see box 15).

Recommendation 28
162. Governments, other public institutions such as universities, and international organizations should develop sustainable development criteria for their procurement, with the aim of achieving a shift towards cost-effective sustainable procurement over the next 10 years, and should issue annual public reports on their progress as from 2015.