Behavioural economics offers insights for environmental policy in cases where neoclassical economic tools, such as incentives, are insufficient. Nudges are “softer” tools that can promote environmental sustainability. In the present thesis, I used insights from behavioural economics to, first, optimise the design of incentives embedded in electricity tariffs that aim at promoting electricity conservation and, second, tested nudges to increase consumer choices of such tariffs. How strongly do incentives influence consumers' tariff choices? Are there systematic differences between consumers? Can nudges increase incentive-based tariff choices? The main findings from four empirical studies are that 1) consumption-contingent incentives influenced tariff choices; 2) there were systematic differences between consumer choices that could be identified by means of market segmentation and explained by psychological factors; 3) commitment was effective to nudge consumers towards sustainable choices; and 4) the default could not systematically nudge sustainable choices. The findings highlight the potential of applying behavioural insights to environmental policy.