Wednesday, December 2, 2015

Will Ben & Jerry's carbon price help moove markets?

Bob Holland faced the challenge of developing a strategy that not only addressed Ben Jerry’s current competitive difficulties, but was also consistent with the company’s unique mission and background. In keeping with their social mission, Jostein Solheim, Ben & Jerry’s current CEO, has embraced carbon pricing as a method for reducing global warming emissions. Carbon pricing charges those who emit carbon dioxide for their emissions. Ben & Jerry’s set an internal carbon price and the revenues are recycled to help farmers finance the purchase of bio digesters, which process manure to generate renewable energy. For each tonne of carbon a technology is expected to offset, Ben and Jerry’s will pay the farmer $10 to alleviate upfront costs. However, costs can be as high as $357 per tonne according to a report by the CDP ( Carbon pricing benefits more than just the climate. It addresses economic and environmental challenges, from sluggish growth to rising greenhouse gas emissions and escalating impacts of climate change.

Ben & Jerry’s is still testing out various financial models for mobilizing investment in clean technology, but believes the scheme will be attractive to farmers, especially with the struggles farmers have faced with the concept of climate change. Because farming costs are relatively fixed, yet prices swing, farmers are very interested in anything that can expand their business model, cushion them and create new revenue streams. Governments favor the scheme as well. Any method that works economically as well as environmentally is seen as win-win.

Ben & Jerry’s is a part of a coalition of companies calling for world leaders to set a global price on carbon.  To sweeten the deal, Ben & Jerry’s has given away free ice cream to weary diplomats during the U.N.’s technical negotiations.  “The world’s biggest companies anticipate a future in which their carbon emissions carry a price,” said Lance Pierce, president for CDP America. Research shows that curbing climate change and growing the economy can go hand-in-hand. A well-designed carbon price can help areas achieve their climate goals while improving economic efficiency and fostering growth.

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