Incentives and disincentives are effective tools of persuasion, encouraging people to perform in ways they might not otherwise by rewarding or punishing certain behaviours.

Research in behavioural psychology has emphasised the importance of incentives and disincentives to reward or punish behaviour we want people to engage or disengage in.

Incentives and disincentives have a potential to promote and reinforce sustainable behaviour. They have been successfully used in various waste reduction programs. For example, having people pay for disposable shopping bags in supermarkets draws one’s attention toward the cost of disposable bags and instigates the use of reusable bags. The Aldi supermarket chain in Australia charges 15 cents per plastic bag rather than giving them away free. As a result, many people bring their own bag to the store or buy the reusable hemp bags sold in their stores.

A look at what is collected during Clean Up Australia day shows that beverage containers have surpassed cigarette butts as the item most likely to be thrown away. 15,000 bottles and cans are discarded or landfilled in Australia every minute.

Envirobank recycling has developed reverse vending machines (RVM), an incentive-based product to address this issue. The South Australia and NT governments have installed RVMs in public places that let people insert their empty cans or drink bottles and redeem rewards or cash in return. The ‘cash for container’ scheme has proved effective in reducing litter and increasing recycling rates to 80 to 95 per cent. South Australia is leading the way, with recycling rates that are double those of the rest of the country.

Recycling Pays

Vending machines that reward for recycling

An average Australian spends around $9,000 a year on a car. If we divide this amount by months, weeks or days, we spend nearly $25 a day to have our car sitting in the driveway. People can improve their health and finances as well as reduce traffic congestion and carbon emissions by choosing active modes of transport such as walking, cycling, public transport or car sharing to get around instead.

Optus realised major traffic problems when they relocated 6,500 employees from nine sites across Sydney to a newly built campus in Macquarie Park with only 2,002 car parking spaces. Optus developed a workplace travel plan with an emphasis on improving access to work by sustainable modes of transport. The plan employed disincentives, incentives and car share arrangements to make the commute easier for employees while reducing dependence on private vehicles and parking space.

The incentives include development of amenities such as a childcare centre, gym and a convenience store on site to reduce the need to travel. The company also provides bicycle storage, showers and lockers on-site, the reimbursement of public transport costs and broadband and mobile phone discounts for employees to facilitate remote working and support flexible work practices. Disincentives include a levy to allocate parking according to need, priority for ride sharers and differentiated car parking charges based upon the number of commuters within each car to encourage sustainable modes of commuting.

Continuous improvement and evaluation of the travel plan resulted in a high proportion of trips by active modes of travel. According to the Australian Bureau of Statistics 2006, approximately 45 per cent of Optus employees commuted using active modes of travel compared to 10 per cent of other employees in the local area. It also helped build relationships between people who might not talk to each otherwise, something organisations like Optus really value.

45 per cent of Optus employees commuted by active modes of travel

Some 45 per cent of Optus employees commuted by active modes of travel

Although incentives and disincentives are effective tools to engage people in desired sustainable behaviour, they may not be sufficient to nudge people toward long-lasting behaviour change. Many experiments have found that incentives/disincentives shift people’s attentions away from the normative reasons for their behaviour such as morality and ethics, and paradoxically discourage the very behaviour they were meant to stimulate.

This shift away from normative considerations may not only affect the onset of the target behaviour, but may also reduce the likelihood for people to engage in other types of sustainable behaviour. Hence while incentives and disincentives may temporarily affect the target behaviour, they may not influence people’s underlying attitudes and self concepts. Hence we should use them appropriately or employ alternative tools where potential risks associated with the implementation of incentives and disincentives outweigh their intended benefits.