Delegates have agreed to Reducing Emissions from Deforestation and Degradation, known as REDD+, a program that aims to keep trees standing in tropical countries.
The plan will involve payments made by developed nations to developing nations who cut carbon emissions by countering deforestation. In addition to curbing forest degradation and deforestation, REDD+ promotes pro-forest activities.
The results-based understanding means that developing nations will have to provide information on safeguards for local communities before they will receive any money.
Earlier in the week, countries agreed to a $280 million package to promote more sustainable use of land.
"The ministers have been working for almost 10 years to finalise the rules which will allow donors to invest in forest management practices in the developing world and get a way to verify the emissions reductions," said Paul Bledose, of the German Marshal Fund.
Notable deaths of 2014 [PHOTOS]
600-year-old canoe discovered in New Zealand