This report explores a sectoral crediting mechanism (SCM) for developing countries in a post-2012 UNFCCC climate regime. The report explores how a SCM could be implemented in practice. Different options for designing a SCM are identified and their advantages and disadvantages are discussed. Based on this analysis of options, a consistent policy framework for the introduction of a SCM under UNFCCC is proposed. The report focuses on a bottom-up approach where developing countries make proposals for implementing a SCM which are subsequently reviewed and agreed internationally. The report aims at facilitating the negotiation of such a mechanism under the UNFCCC.