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Group incentives can and have been used to address a range of environmental and resource problems. These schemes base individual penalties and/or rewards on the performance of a group of individuals or firms who contribute to the environmental or resource problem. The economics literature on team incentives and public goods, as well as the literature specifically on environmental and natural resource management, provides insights into the design of group incentives. This article reviews the literature on group incentives in the context of environmental protection and natural resource policy. This literature suggests that group incentives can be effective and even efficient as environmental policy tools. However, the outcomes under group incentives will likely depend on a combination of the policy design and the nature of the internal group interactions. Within-group interactions are likely to be particularly important when policies involve thresholds so that coordination is needed to reach a cooperative equilibrium. Expected final online publication date for the Annual Review of Resource Economics, Volume 14 is October 2022. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates. 

Abstract Transformation toward a sustainable future requires an earth stewardship approach to shift society from its current goal of increasing material wealth to a vision of sustaining built, natural, human, and social capital—equitably distributed across society, within and among nations. Widespread concern about earth’s current trajectory and support for actions that would foster more sustainable pathways suggests potential social tipping points in public demand for an earth stewardship vision. Here, we draw on empirical studies and theory to show that movement toward a stewardship vision can be facilitated by changes in either policy incentives or social norms. Our novel contribution is to point out that both norms and incentives must change and can do so interactively. This can be facilitated through leverage points and complementarities across policy areas, based on values, system design, and agency. Potential catalysts include novel democratic institutions and engagement of non-governmental actors, such as businesses, civic leaders, and social movements as agents for redistribution of power. Because no single intervention will transform the world, a key challenge is to align actions to be synergistic, persistent, and scalable.