Abstract
Creating fiscal incentive mechanisms has become one of the most challenging elements of Reducing Emissions from Deforestation and Forest Degradation (REDD+). Scholars believe that the success of REDD+ will depend mainly on how its fiscal incentive mechanisms are designed and implemented. In the context of Indonesia's public finance, village fund (DD) as one of the funding devices under the Intergovernmental Fiscal Transfer (IFT) system has the potential to become an instrument for the mechanisms. The policy options for creating the mechanism proposed on the allocation and distribution aspects of DD. Linking the selected options on such aspects will generate an integrated and sustained fiscal incentive mechanism for REDD+.
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