Payment for environmental services has rapidly gained worldwide attention as an instrument for promoting conservation and addressing rural poverty, nevertheless, the practice has demonstrated that these schemes have important limitations. It is crucial to take a closer look at these limitations, given the renewed interest and hasty adoption of such schemes in an attempt to secure ecosystem services of global interest, as is the case with emerging schemes for mitigating climate change based on Reduction of Emissions by Deforestation and Degradation (REDD). This is particularly pertinent as REDD schemes are primarily being developed based on conventional PES mechanisms.