Full text can be accessed at http://www.ajol.info/index.php/tjfnc/article/view/89361Economic instruments such as Payment for Environmental Services (PES) have become very popular to jointly address poverty alleviation and sustainable management of natural resources. In this paper we focus on the suppliers of the environmental services in a case study in the Coastal Belt Forests of Tanzania. A Choice Experiment is conducted to determine charcoal makers' willingness to participate in a PES scheme and the compensation necessary to make them give up their destructive – but vital income generating – forest activities, mainly charcoal production. We find that this willingness does exist, especially if other cash generating alternatives are offered. However we also conclude that a PES alone will not be sufficient to halt the destruction of the Coastal Forests if nothing is done to curb the growing urban demand for charcoal.