Mangrove forests of Southeast Asia have significantly decreased to give way to more favored economic activities such as aquaculture production, rice farming, and very recently oil palm plantation development. The severe cover loss implies the serious reduction of essential ecosystem services, particularly climate change mitigation. This chapter therefore sought to synthesize and describe the blue carbon stock potential of the region’s mangrove forests, in the context of developing community-based payments for ecosystem services (PES) schemes that could offset the declining trend. Estimates showed that Southeast Asian mangroves could store as much as a kiloton carbon stock per hectare, an ecosystem value that is worth sustaining. Lessons learned from pilot PES projects has revealed some governance concerns that need to be addressed in order to ensure the benefits and commitment of local communities in forest conservation. These include: (1) clarification of tenure rights; (2) provision of equitable financial incentives to offset mangrove-degrading livelihoods; (3) development of appropriate and acceptable methodologies to account and trade blue carbon credits; (4) inclusion of local needs and interests in PES program and other coastal resource management plans; and (5) ecological considerations in plantation development. Some of the helpful policy and institutional recommendations to overcome these challenges include: (1) stronger incorporation of mangroves into marine protected areas; (2) full adoption of community-based mangrove management approach to further improve local capacities to manage mangroves; and (3) forging private sector partnership to support the blue carbon project.