The role of tropical deforestation in global climate change is a strong justification for its inclusion in the UN's global climate treaty. In order to successfully address deforestation and forest degradation in developing countries, a compensation scheme must include the main actors involved in deforestation and provide incentives for forest stewards who protect forest carbon stores. Since each tropical forest country represents a different mix of public and private tenure of forested land, policies at the UNFCCC level will need to be sufficiently flexible to allow countries to tailor REDD programs to reflect these differences. At the same time, Parties need to negotiate a basic REDD structure that can apply to all countries as a framework under which to build their national programs. We propose an approach that will incorporate the three main actors of deforestation and forest protection in tropical regions: government, private forest owners, and public forest stewards (including indigenous people and others). These funds and the activities supported by them are envisoned to function most effectively under a combined market and non-market approach.