Background The over-consumption of world resources is such that the chances of future generations - and the developing countries - to have access to their fair share of scarce resources are becoming increasingly endangered. Moreover, the consequences of the use of resources in terms of impacts on the environment may induce serious damages that go beyond the carrying capacity of the environment. These effects risk being aggravated once the developing world has taken up growth and resource use similar to the industrialised countries. The issue of sustainable consumption has gained broad international attention in the years 2000. The issue was addressed in the 6th Environmental Action Programme (6EAP, 2002): the objective for the thematic strategy on the sustainable use of natural resources was described as "ensuring that the consumption of resources and their associated impacts do not exceed the carrying capacity of the environment and breaking the linkages between economic growth and resource use". Sustainable consumption and production was included in the Johannesburg Implementation Plan which was drafted during the Johannesburg Summit on Sustainable Development in September 2002. Following on from that, the European Commission elaborated its strategies in this field and adopted the following Communications: ‘Integrated Product Policy’ on 18th June 2003 and ‘Towards a Thematic Strategy on the Sustainable Use of Natural Resources’ on 1st October 2003. Using the right incentives is a key issue in creating a change of behaviour. The Dutch steering group "Incentive Systems Sustainable Products" encouraged the use of modern multi-vendor electronic savings systems to promote sales of sustainable products from the mid 1990s. The idea for a local Sustainability Incentive Card in Rotterdam came up in 1998 in the context of the Local Agenda 21 process. The current LIFE project is the concrete realisation of this idea. The European Commission co-funded the project because of the need for innovative approaches and good examples that can lead to a change of behaviour towards sustainable consumption and production. The project is an example of shifting the demand of consumers by rewarding them for their efforts instead of disincentives and punitive charging for unsustainable behaviour which has tended to be the more commonly used approach in environmental policy: using carrots instead of sticks. Objectives The main objective of this project was to demonstrate the effectiveness of the Sustainable Incentive Card, “NU-Spaarpas” (initially called “PlusPunten”) in Rotterdam. The aim of the card was to reduce the environmental impact of consumption and to change the behaviour of the general public towards sustainable consumption patterns. To this end, the card would increase the demand for and improve the image of sustainable goods and services, promote the sustainable daily behaviour of consumers and increase the support for and supply of sustainable products by SMEs. Other specific objectives were: stimulation of public transport, stimulation of waste separation and re-use, stimulation of green financial products, and contribution to the implementation, updating and development of the EC environmental policy. Results The NU Spaar-pas Card (NU Card) project implemented a scheme that rewards people for their efforts to consume more sustainably. People use their NU smart card to get points for separating waste and for buying sustainable products. Sustainable products include labelled organic, energy-efficient and fair-trade goods, bicycles, green financial products, renewable energy, rental, repairs and second-hand goods. Consumers can spend points on more sustainable products, on public transport, or on leisure activities around the city, such as going to the cinema. The system was primarily aimed at changing people’s behaviour, and to a lesser extent at changing their mentality. The system worked using chip card technology. Each point of issue had a terminal with a barcode scanner and each NU card had a barcode and a chip. It was intended to make NU self-financing (from basic connection fee subscriptions that companies pay, and the income that comes from cross-selling). The demonstration project ran between February 2001 and September 2003. In the first period, until May 2002, the NU-card system was defined, built and tested and its implementation was prepared. The actual demonstration started on 21 May 2002 when the system went live. From then on, the project team launched a significant and continuous marketing effort to increase the number of active cardholders, participating shops and businesses to encourage mass take-up in the system. After a difficult start the project team succeeded in adjusting its proposal to participants in such a way that the number of participating households and businesses increased and came up to expectation. The number of points issued and cashed was however much lower than foreseen because the system came up to speed much later than expected. The demonstration ended in September 2003, however the system was still far from being self-supporting. The project team tried to find continued start-up funding but this was extremely difficult. An additional bridging funding of 3 months was obtained from the project partners but when at the end of this period no further funding was found, the project team terminated the pilot on 31/12/03. Even if the project had to be terminated, the pilot was considered a real success. The project was the first advanced loyalty system in the world that focussed on sustainability and had a high demonstration value. It made use of proven technologies (chipcards etc.) and techniques (incentive cards, marketing) in a new sector (sustainability). The project team was able to demonstrate that the reward system worked in practice. Valuable experience was gained and many lessons were learnt from carrying out the project: 1. A major lesson concerned the financial feasibility of the system. During the demonstration project the costs amounted to about €100 per cardholder per year. The start-up costs of the project in Rotterdam were thus relatively high. The technical infrastructure, IT solutions, the communication plans and all technical and commercial adjustments during the trial made it all very costly and in the end it was too costly for bringing income and costs into balance. On the basis of the Rotterdam pilot, the Stichting Points consultancy (project partner) defined new business models for proposing a financially sound sustainable reward card system. One of the possible models was a national introduction that would reduce the costs per cardholder considerably (to less than €4 per cardholder assuming 1 million cardholders and 2.600 participating SMEs) because a much larger target group would be reached with only limited extra costs. A greater density of cardholders and SMEs would lead to a more frequent use of the cards, more points saved and thus more income for the organization. In this model after just over 3 years it was estimated that the costs of the incentive system could be fully paid from the income of services delivered to the paying clients (i.e. SMEs and civil services). This would however mean a considerable scale-up: a factor 200 compared to the Rotterdam pilot. The strategy was to perform some other pilots in new geographical areas first; scaling up was seen as the next step. 2. One of the most important conditions for a successful commercial or cost neutral exploitation is enough mass appeal. When there is mass of consumers, it is more attractive for businesses to participate thus creating more opportunities for sustainable production and purchasing. 3. Another lesson was that the card should be distributed to all households free of charge. In that way enough people start using the card and the communication costs can be used for encouraging people to use the card. Consequently businesses and shops will be lured by widespread use of the card. 4. The project team identified also that rewarding points on only sustainable (or labelled) products was not enough. The number of eligible products for shops was too small to make the programme work. Most shops were just not interested in only rewarding sustainable products. Every product was eligible for points, but sustainable products would get up to four times as many points. The project team has disseminated the project results in an impressive way. Several dissemination products (magazine, papers, radio, tv, street posters, vouchers, adverts, flyers, even the outside of a train) were produced and distributed to municipalities, government organisations, consumer NGOs, environment NGOs and businesses, in the Netherlands and across Europe. Some stakeholders performed feasibility studies and published internet publications in order to encourage a possible take-off of the system in their respective areas or countries, e.g. the Welsh Consumer Council, the UK New Economy Foundation in cooperation with the UK National Consumer Council and Groen Links Amsterdam. This project has been selected as one of the 24 "Best" LIFE Environment projects in 2004-2005