Such trading is a well-established practice in a great many emissions trading schemes around the world. Secondary markets provide a means for auction participants to sell units or to purchase any shortfall and, as such, create a powerful incentive for organisations to reduce their emissions. But to do this, participants and other intermediaries trading in ETS units need to have the confidence that the price that they are paying and are basing their investment decisions on will remain stable. To create a stable and credible framework for the sale and purchase of New Zealand units, both the primary and the secondary markets need to operate in a way that is complementary, supporting stability, liquidity, price discovery, and transparency. This bill and the introduction of a confidential reserve price, below which no units can be sold at auction, will ensure that. 