Incentive Mechanism

The incentive mechanism can take multiple forms and is designed to encourage civic engagement and incentivise sustainable actions/behaviours. A frequent practice is for the municipality to partner with an organisation to develop a platform or an app, where citizens can pick and complete various actions in exchange for a reward (e.g., virtual points, virtual currencies, digital vouchers), which serves as an incentive mechanism for more sustainable behaviours.

Step 1: Design the digital platform

The first step is to design and develop the digital platform, ensuring it is intuitive, engaging, and accessible to a wide range of users. The digital platform should include features such as activity tracking, a points system, a rewards catalogue, and social engagement tools to encourage participation.

Step 2: Record sustainable activities

Users can engage with the digital platform and earn digital rewards (e.g., virtual points, virtual currencies, digital vouchers) by participating in eco-friendly activities and logging their efforts through the platform. These activities can range from walking and cycling to volunteering for community projects, recycling, using public transportation, or attending sustainability workshops. The app may use GPS tracking, QR code check-ins, or photo submissions to verify actions and ensure fair point allocation.

Step 3: Accumulation of digital rewards

Each completed action earns users digital rewards, which accumulate over time. The platform may include features like progress tracking, badges, or leaderboards to boost engagement and motivation. Bonus incentives can be introduced for challenges, group activities, or consistent participation, fostering a sense of friendly competition and community involvement.

Step 4: Redeeming digital rewards

Users can redeem their collected points for various rewards, such as discounts at local businesses, free or discounted entry to cultural events, public transport credits, or eco-friendly products. Additionally, they may have the option to donate their points to city initiatives, such as urban greening projects, social programmes, or sustainability campaigns.

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The initial costs cover the design and development of the digital platform, along with a citizen engagement strategy and communication efforts to raise awareness and promote the platform. After launch, ongoing expenses include operational and maintenance costs. Additionally, if the municipality wishes to expand its customised environment—such as adding new content, challenges, or rewards—further investment will be required.

Encourages behavioural change: The incentive mechanism scheme is designed to drive and sustain changes in behaviour by rewarding desired actions. By providing rewards for these actions, the scheme motivates individuals to adopt and maintain sustainable behaviour over time. This engagement helps ensure long-term participation rather than once-time actions.

Raising awareness: By making sustainable actions more engaging and rewarding, the incentive mechanism can foster greater awareness and involvement in urban initiatives.

Engaging users and local businesses: Encouraging citizens to adopt and consistently use the platform can be challenging. Effective outreach strategies, user-friendly design, and appealing incentives are essential to drive engagement and ensure long-term participation. In addition, local businesses may be reluctant to accept virtual currencies or digital vouchers due to lack of familiarity with such systems or the technical complexity of integrating them into their existing point-of-sale systems.

Technical complexity: Developing, integrating, and maintaining the platform requires technical expertise and resources.

Legal and fiscal challenges: The implementation of virtual currencies or other rewards may involve navigating legal and regulatory landscapes. Different countries or regions may have specific rules regarding digital currencies, vouchers, or rewards. In addition, virtual currencies and rewards might be considered taxable income in some jurisdictions.

Engage with local stakeholders: Actively engage with local stakeholders in the co-creation and co-design phase to understand their expectations, allowing the app to be tailored to meet user needs. This approach ensures that the platform resonates with its target audience but also helps build acceptance among citizens.

Learn from best practices: Draw on best practices from other cities. By identifying proven strategies and adapting them to local contexts, municipalities can develop their own platforms, maximising impacts and avoid potential pitfalls.

Invest in awareness campaigns: Raising awareness through campaigns is important for encouraging widespread citizen and business participation. Informing the public about the benefits of sustainable practices and the rewards they can earn for their actions helps build momentum and engagement.