It introduces a mechanism for New Zealand units to be held back from sale if, at the end of the auction, the clearing price for a unit is lower than what is known as "a confidential reserve price". The principle is simple: ahead of each auction, a confidential reserve price would be set relative to the secondary market price of New Zealand units; if, once the auction has been completed, the clearing price has dropped below this reserve price, no units will be sold. This will help to maintain a minimum carbon price and strengthen the incentives for major long-term investments in low-emissions technologies, which, in turn, will stabilise the secondary market should prices collapse if an auction does not go to plan. A reserve price will also mitigate the risk of exposing the Crown to a fiscal cost if units are sold for less than the prevailing secondary market price.