Greening and private finance in PPPs are not mutually exclusive…
Inserting environmental considerations into projects not only achieves environmental objectives, it also lowers the costs of the project for the private contractors. For example, whilst requiring materials such as timber to come from legal and sustainable managed sources is a good aim in itself, an efficient heating system for an office building can both help to reduce carbon dioxide emissions and energy usage and result in lower life costs for the contractor.
…As PPPs give incentives to deliver public services in a more environmentally sensitive way…
Private companies have an incentive to consider which design features and construction materials will generate optimum whole life costs across the life of the contract. This might mean that a contractor chooses to invest in higher cost design features if those features will be offset by lower maintenance and running costs during the operational life of a contract and beyond.
…And environmentally friendly technologies are not more expensive…
There is a problem of perception that environmental technologies are a luxury that governments cannot afford. However PPP projects have demonstrated that investing to deliver environmental improvements can lower running costs, reduce waste and have health and social benefits, such as better working conditions.
…Thus making the private sector often amenable to adopting green criteria…
Investors in PPPs have a financial motivation as seen above, for taking environmental considerations into account because the effective use of resources and reduction of waste both in design and construction means lowered whole life costs and hence higher margins. The private sector, in addition, can be a willing partner in advancing true and integrated sustainability principles in PPP programmes based on a company's internal core policy. Corporate social responsibility and sustainable development strategies are increasingly integrated into the operations of the company. Many companies indeed voluntarily include sustainability criteria into their project bids and schemes.35 | A strengthening and further promotion of corporate social responsibility and global business social and environmental accountability will facilitate the consistent incorporation of sustainability in PPPs. |
…And this is particularly true because failure to act can be costly.
Failure to consider green issues when developing a PPP project, means that a once in a lifetime chance can be missed to reduce the whole life costs since the contract may run for 25-30 years and potentially even longer given the asset life.
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35 Achieving value for money for the taxpayer means looking beyond initial price to take account of whole life costs and quality. A low cost design may result in high maintenance and operating costs as negative environmental impacts.