Reward based mechanisms for the participation of local authorities in climate mitigation

Several policies and measures can be defined and implemented by local authorities to tackle climate change, such as those regarding the building, transportation and energy sectors. However, financial barriers often keep municipalities from getting involved in mitigation policies. This paper analyzes economic incentives for cities to make progress towards a low-carbon future. Within the LAIKA project, four Italian cities tested a methodological approach aimed to homogenize carbon accounting and to build up measures verifiable and eligible to gain carbon credits. These carbon credits have been exchanged in a simulated voluntary market and valorized with the allocation of regional funding. The results point out a certain limitation in the participation of local authorities to voluntary markets while highlighting the feasibility and the benefits both in environmental and economic terms of the valorization of carbon credits in regional funding. The paper concludes with some policy implications.