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.