This report provides an exploration of the concept of payments for environmental services (financial benefits to land managers who, through improved practices, enhance environmental services such as carbon sequestration, protection of water quality and biodiversity conservation) and the value chains for wood products in Lao PDR. Both these topics are intrinsically linked by their focus on the forests of Laos and their aim of improving livelihoods for thousands of Lao people, many of whom live below the poverty line.