• Overview
• Legal Frameworks
• PES Contracts
  • Contract Clauses
  • PES Templates
  • CDM Agreements
• Publications

Payments for Ecosystem Services (PES) Contract Clauses

Drafting a contract generally involves adapting and modifying an existing contract, rather than starting from scratch. There are few publicly-available examples, however, of payments for ecosystem services contracts, making negotiating and drafting these agreements much more costly and time-consuming.

The linked pages in the outline below are meant to address this gap by providing basic information about contract clauses, as well as contractual examples. Explanations and examples initially focus exclusively on forest carbon and are drawn from two publications: Contracting for Forest Carbon: Elements of a Model Forest Carbon Purchase Agreement and Lessons Learned for REDD+ from PES and Conservation Incentive Programs, Examples from Costa Rica, Mexico, and Ecuador.

Resource pages for background information include Background: About PES Contracts and a PES Contracts Glossary.

Contract Clauses Outline

• Title, Introduction, Recitals
• Introduction | Ex. 1 | Ex. 2
• Recitals | Ex. 1 | Ex. 2
• Details about the Project and Transaction
• Project Activities | Ex. 1 | Ex. 2
• Delivery | Ex. 1 | Ex. 2
• Price & Payment | Ex. 1 | Ex. 2
• Other Rights and Responsibilities
• Taxes | Ex. 1
• Representations | Ex. 1 | Ex. 2
• Monitoring Reporting & Verification | Ex. 1 | Ex. 2
• Land Transfer | Ex. 1
• Termination for Convenience | Ex. 1
• Default and Remedies
• Force Majeure | Ex. 1 | Ex. 2
• Change in Law
• Failure to Make or Accept Delivery | Ex. 1 | Ex. 2
• Suspension or Cancellation of Payments | Ex. 1
• Default & Remedies | Ex. 1 | Ex. 2 | Ex. 3
• Miscellaneous
• Dispute Resolution | Ex. 1 | Ex. 2
• Forum & Choice of Law | Ex. 1 | Ex. 2 | Ex. 3
• Boilerplate | Ex. 1
• Interpretation & Definitions | Ex. 1 | Ex. 2

About this Project

Funding for the creation of this resource was provided by the Global Environment Fund of the United Nations Development Programme. The following also contributed contractual examples and/or funding for the development of additional resources: Costa Rica National Forest Finance Fund (Fondo Nacional de Financiamiento Forestal), the Mexico National Forest Commission (Comisión Nacional Forestal), the Ecuador Ministry of Environment, Forest Trends, the Program on Forests, the World Bank Institute, the Forest Carbon Partnership Facility, and the Latin America and Carribean Region of the World Bank.

The interpretations and conclusions in these pages are those of the author(s) and do not necessarily reflect the views of contributors or donors.

Disclaimer: Materials on this site are meant to highlight issues that should be considered in PES transactions, not to provide a substitute for experienced legal counsel. It will be essential to engage legal counsel in conjunction with any PES transaction to ensure that any agreements reflect the latest developments in the field and comply with current local and national legislation.

This website is made possible by the generous support of the American people through the United States Agency for International Development (USAID), under the terms of the TransLinks Cooperative Agreement No.EPP-A-00-06-00014-00 to The Wildlife Conservation Society (WCS). TransLinks is a partnership of WCS, The Earth Institute, Enterprise Works/VITA, Forest Trends and The Land Tenure Center. The contents are the responsibility of the authors and do not necessarily reflect the views of USAID or the United States Government.