What sets STEPS Apart
STEPS is Sectoral
STEPS measures emissions performance at the system level and credits for verified sectoral emission rate reductions beyond a continuously declining, country-specific performance benchmark.
Accounting for emissions at the system level requires the measurement, monitoring and reporting and verification (MRV) of emissions from all grid-connected power plants, distributed generation and as electricity imports and exports. This addresses concerns about leakage, when emissions avoided from an activity are displaced by emissions increases elsewhere in the system.
STEPS is Transformative
Sectoral crediting incentivizes governments to design country-specific, long-term policy, legal and regulatory changes that accelerate decarbonization at a system level. This offers countries the flexibility to make their own decisions on how to address the energy transition, as well as energy security, energy access and just transition elements.
Carbon finance can be leveraged to support a wide range of interventions to reduce sectoral emissions, including for investments in clean energy, grid and storage infrastructure necessary for deployment of renewables, as well as concessionary finance to address the needs of communities and workers to ensure a just energy transition.
STEPS is UNFCCC aligned
STEPS’ jurisdictional approach is consistent with United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP) Paris Agreement decisions, including Paris Agreement accounting and reporting and Article 6 cooperation. STEPS promotes national ambition and contribution to Paris Agreement goals, including progress toward the fulfillment of Nationally Determined Contributions (NDCs) and sustainable development objectives.
STEPS has been designed to meet carbon market demand from sovereign governments for Paris Agreement Article 6.2 cooperation, for results-based payments from the World Bank’s Scaling Climate Action by Lowering Emissions (SCALE) partnership, and from corporate buyers participating in the Kinetic Coalition.