Financial incentives can provide the motivation for individuals to perform an activity that they already engage in more effectively, such as recycling, or to begin an activity that they otherwise would not perform, such as carpooling. This chapter will provide evidence of the impact of incentives on a diverse array of sustainable behaviors and provide some general suggestions on their use.

While incentives have been used to foster a variety of sustainable behaviors, they have been applied most extensively to waste reduction. For example, a growing number of North American cities have implemented user-fee systems for garbage disposal. While significant differences exist in the methods used, reviews of user fee systems clearly indicate that they dramatically reduce the amount of waste going to landfill, and provide additional motivation for households to recycle, compost and, perhaps, source reduce.

Here are several examples:

  • When San Jose, California introduced a user-pay program in…

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