Question
Company A is evaluating an offshore investment in renewable energy to pay for its CO2-e emissions and sell the remainder (RECs) to the Australian market.
Company A is evaluating an offshore investment in renewable energy to pay for its CO2-e emissions and sell the remainder (RECs) to the Australian market. The questions in this exam will present the theories and characteristics for this investment in RECs.
Assuming that Company A will generate 3M RECs in the offshore operation. Considering that the company's own consumption is 300,000 RECs/a will be used for the operation in Australia, 2,7MRECs/a will remain to be sold in the Australian market.
Assuming that in 2020 the REC's cost is $40 and in 2040 will be $50.
If it is missing some information, you can assume. But make sure that your assumptions will be mentioned in the answer.
Scenario analysis (optimized and sustainable carbon offsets)
Your carbon offset business is a means to provide optimized and sustainable carbon offsets.
Question
Explain in words how you may achieve this.
Hint: the rate of return of a carbon offset company is approximately 1.57% return on asset per annum.
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