Incentive programmes
In the Incentive programmes, the municipal administration is mostly responsible for creating or enabling a regulatory framework in which private actors can develop and implement NBS projects. The framework establishes the policy´s objectives, goals and guidelines. The costs related to the design, implementation and, when necessary, maintenance and operation are borne by private entities. The use of soft regulations tends to be the norm in such frameworks, with the use of economic and informational incentives.
Incentive programmes might be targeted at various private entities ranging from for-profit to non-profit entities, property owners and local communities. As multi-stakeholder governance provides an opportunity to private companies to shape policy arenas according to their preferences, policymakers should have a clear understanding of private actor’s interests to support the design of adequate positive and negative incentives that align all actors towards common objectives. For the local communities, adequate regulatory frameworks need to be designed to allow for the bottom-up initiatives to happen.
ADVANTAGES & DISADVANTAGES
• Well-designed incentives encourage private entities to implement infrastructure projects, sparing the city from costs.
• When appropriately designed, incentives provide participating actors with flexibility in terms of financing, schedules, designs, technologies used, location, which tends to improve the quality of results in an efficient manner.
• As voluntary policies resort mostly to soft regulations, they can be designed as modular frameworks, which could encourage engagement private stakeholders to act without imposing additional costs on companies that cannot afford it.
• Participation of private entities tends to promote cooperation and can provide a more effective means for public participation in planning decisions.
• Policymakers should carefully consider using incentive programmes to deal with urban issues that present significant risks for residents (e.g. floods, fires, landslides, and water and air contamination) and are considered to be urgent by stakeholders.
RISKS
• Risk of not accomplishing results. Reasons for low engagement might include inadequate sets of incentives, lack of political trust among actors, unfavourable economic circumstances, and lack of appropriate technical capacity to comply with NBS-related requirements.
• "Leadership delusion", i.e. a false perception that measures taken by the institutions involved in these policies – municipal administrations and private participants – are having significant impacts, even when objective results show otherwise.
• The quality of results. Policymakers should always have in mind that there is no necessary connection between the involvement of the private sector and the quality and sustainability of the results.
Related financing options
Private sector financing
Private companies integrate NBS into their processes and structures either voluntarily through marked based policy instruments, such as incentive systems or through coercion (binding regulation).
Supporting grassroots initiatives
Supporting relatively small-scale initiatives, focused on a specific site, usually located on public or municipal land. Initiatives are normally started and maintained quite autonomously by local residents.
Community Management/Ownership of NBS
Management of NBS can be transferred to community groups. It can range from community adopting a green public element to a community asset transfer, which is a transfer of the ownership of the municipal asset to a community organisation.
Crowd-funding / sponsorship
Raising funds for a project, event or activity by asking a large number of people to each contribute a relatively small amount of money. Sponsorship can involve contractual agreements between the sponsoring company and the recipient of the financial support that implies advertising or promotion rights for the company.
City Resolutions
Cities can enact policies which adopt pre-existing standards, simplifying the technical design of policies and outsourcing monitoring and certification activities. It can set a minimum compliance standard and number of participants while offering incentives for additional efforts adopted by project developers and/or other private sector entities.
Grants to private property owners and community groups
Cities can provide money to private entities directly for green infrastructure practices or promote them indirectly through low-impact development competitions.
Reverse auction
An auction could be a cost-effective tool for implementing controls on stormwater runoff quantity at the parcel level. In such case, there are multiple “sellers” of the service (i.e. stormwater mitigation) and one “buyer”, which is usually the utility company.
Storm water retention credits
To provide more flexibility in their onsite retention rules, cities may create “stormwater credit trading” programs, which allow developers to meet their stormwater retention requirements on their own sites or purchase “credits” for stormwater retention from others who have voluntarily retrofitted their properties through a stormwater credit-trading program.
Parks Trust
An independent charity which manages city-wide parks and green space portfolio for the benefit of the public. Usually is a self-financing entity which relies on a number of different income sources, but always acts in the service of the public.
Awards and recognition programs to the property owner
City-led programs that officially certify private properties that have green and blue infrastructure elements.