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U.S. wants federal contracts to reflect climate risk By Reuters

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© Reuters. U.S. President Joe Biden speaks from the East Room of the White House, Washington, U.S.A, October 13, 2021, about the global supply chain bottlenecks in transportation. REUTERS/Leah Millis

By Valerie Volcovici

WASHINGTON (Reuters] – On Thursday, the Biden Administration began a process for amending Federal Procurement Rules to force the U.S. government — the biggest buyer of goods or services in the world – climate change risk into its procurement contracts.

In an effort to minimize the climate risk, the Administration issued a Notice of Proposed Rulemaking. Federal contractors were invited to provide input within 60 days to amend the Federal Acquisition Regulation.

In May, President Joe Biden issued an executive order to regulate the rulemaking process. It aims to reduce greenhouse gas emissions in the supply chain and increase resilience to climate change.

“Today’s action sends a strong signal that in order to do business with the Federal government, companies must protect consumers by beginning to mitigate the impact of climate change on their operations and supply chains,” said Shalanda Young, acting director of the White House Office of Management and Budget.

The executive order called for amendments to federal procurement rules to factor in the “social cost” of greenhouse gas emissions, which is an estimate of the monetized damages associated with increased emissions.

The public is invited to provide input on methods for measuring greenhouse gases emissions from products and services, how they can be considered in procurement decisions and what the government can do to standardize reporting.

Young stated that public procurement decisions can be changed to “shift markets, drive innovation and create new standards worldwide.” 

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