In the transition towards a low-carbon future in Europe, cities' actions are of major importance due to the prominence of urbanization, both in terms of population and in terms of greenhouse gas (GHG) emissions. As a result, we need city authorities to act, by using their competences as policy makers as well as energy users. However, cities are still not moving as fast as one might expect, indicating the need for additional incentives to prompt local action. Therefore, the aim of this paper is to present an overview of external incentives that might prompt cities to act and to highlight good practices that could be used in future initiatives. This paper first discusses how to evaluate the climate and energy performance of a city and how local authorities can contribute to its improvements. Moreover, it analyses the disincentives that local governments are confronted with, categorizing them as simple market failures, institutional failures and multi-agent failures. The paper then presents a survey of initiatives at national and EU levels to promote local action towards a low-carbon future; grouping them into tambourines, carrots and sticks. We focus on Austria, Germany, the Netherlands and Sweden because they are pioneering countries regarding energy policies for cities.