Abstract: As the primary objective of this paper is to assist policy makers in developing payment guidelines, our target audience is all levels of government agencies who are actually involved in designing and implementing PFES payment distribution mechanisms (e.g. the Vietnam Forest Protection and Development Fund (VNFF) and pFPDFs). However, other actors, including donors, civil society organizations (CSOs) and international organizations, who are supporting the implementation of PFES, and communities and village management boards, who are handling actual PFES payment distribution, might also find this paper useful in shaping their design and implementation of PFES and other marketbased instruments. Our paper may also be helpful to organizations interested in applying lessons learnt from PFES payment distribution in future REDD+ projects. --- Our paper is divided into four parts: --- Part 1 introduces the concept, principles and analytical framework that underpin payment distribution scheme development, and provides a useful resource for those seeking an overview. It also provides overarching questions that need to be considered and answered before developing appropriate payment distribution mechanisms. --- Part 2 provides more detailed advice for those designing and implementing PFES payment distribution mechanisms on what they need to consider during each step of the design and implementation process. --- Part 3 provides an analysis of existing PFES payment distribution schemes in Vietnam to provide practical lessons learnt from using the 3Es (effectiveness, efficiency and equity) framework. --- Part 4 provides a summary of the key points for policy design.

Free full text http://www.cifor.org/publications/pdf_files/OccPapers/OP-163.pdf.