The Standard for the Transformation of the Electric Power Sector (STEPS) is a sector-wide carbon crediting standard that aims to incentivize host country investment, planning and policies to deliver long-term structural changes necessary for electric power sector emissions to peak sooner and decline faster to meet Paris Agreement temperature goals.
The International Energy Agency (IEA) indicates that a more rapid and just transformation of developing country power systems requires that clean energy investment in developing and emerging economies, excluding China, must increase seven-fold to $1.9 trillion a year by the early 2030s to keep a 1.5°C limit on warming within reach and avert catastrophic climate impacts on communities worldwide.
As electricity demand continues to rise rapidly to support economic growth and improve energy access, STEPS aims to catalyze finance to speed the just energy transition by enabling host countries to generate and market high integrity carbon credits resulting from their accelerated, broad-based electric power sector decarbonization.
The sectoral crediting approach incentivizes carbon pricing policies such as cap-and-trade and carbon taxes; regulatory and operational changes to improve efficiency including auctions and dispatch priority; renewable energy incentives such as feed in tariffs, long-term PPAs, and fast track permitting; fiscal incentives for early retirement of coal fired power plants and building of CCS; and building out the grid infrastructure and energy storage to accommodate renewable energy.
STEPS is being developed and managed by Environmental Resources Trust (ERT) at Winrock International. STEPS is based on ERT’s pioneering work managing ACR, the world’s first independent carbon crediting program, and the Architecture for REDD+ Transactions (ART), a jurisdictional crediting program to protect and restore tropical forests at scale.
