Carbon Credit Trading

H. J. Heinz Company, more commonly known as Heinz, significantly contributes to the global carbon dioxide emission due to its many manufacturing facilities worldwide. Carbon credit trading is a major growing sector of the international trading economy; this must be kept under consideration by all enterprises. Heinz's facilities in the EU are under the influence of the Kyoto Protocol and the European Union Emission Trading System (EU ETS).

For Heinz Company, this currently applies for their facilities in the EU, but not for those in the U. S. This resulted in the emergence of volunteer carbon credit markets to prepare for the inevitable integration of the Kyoto Protocol in the United States. Meanwhile, while the United States' government delays the integration of the Kyoto Protocol, the world emission levels continue to rise and the economic opportunities related to the trading of carbon credits are unreachable for the industries in the United States.

There are two possible strategic solutions for Heinz to pursue the carbon credit trading and reduce their total carbon emission levels in the United States: entering the volunteer carbon trading market, or investing in anti-pollution technologies. After thorough analysis of each alternative, the best option for both Heinz and the market as a whole is to follow through with both alternatives. In fact, reducing carbon emissions through anti-pollution technologies and entering the volunteer carbon market go hand-in-hand and will increase total profits as well as total world social welfare.

However, it is an extremely costly endeavor that few companies can afford to implement. Fortunately, Heinz has the financial stability to implement these alternatives as it is a long-term solution that will guarantee sustainability in the food producing market in the years to come. November 18th, 2009 Heinz North America Scott O'Hara, Executive Vice President, President & Chief Executive Officer P. O. Box 57 Pittsburgh, Pennsylvania 15230, U. S. Dear Mr. O'Hara , We are independent scholars from McGill University.

Over the past months we have done extensive research on the pressing issue of carbon emissions and carbon trading in the E. U. and in the United States and their impact on international trade. As the CEO of Heinz, and as the primary decision maker of that company, we send you this short report on the matter with the hopes that you will take the necessary actions. In this report, we mainly examine the carbon trade relationship of the E. U. and the United States.

We also discuss the role of the E. U and Kyoto Protocol and their objectives they have been subject to achieving over the past years, and the years to come. We analyze the economic effects on regulation of carbon emissions and outline the alternatives you may soon have to choose from. Finally, we humbly make a suggestion on what is, in our opinion, the best plan of action available. Below, you will find listed three key sources that will provide background on the issue. We look forward to answering any questions you might have.