of the ETS, such as fuel companies to motorists, would not be allocated free units. While participants whose produce is priced internationally, such as dairy exporters, would be allocated a level of free units. Lack of a cap In 2007, the Ministry for the Environment acknowledged that the NZ ETS would not have a binding, absolute limit on the total level of emissions allowed in New Zealand. While the quantity of NZ Units gifted to eligible emitters would be fixed, the quantity of international 'Kyoto-compliant' units that could be brought in to match emissions would not be limited. Unlike most other emissions trading schemes the NZ ETS has no limit on the volume of international emissions units (CERs and ERUs) that may be imported. Consequently, there is no cap or limit on the volume of emissions permitted in New Zealand provided that emissions units are imported into the country and surrendered. Ministry for the Environment Fact Sheet 16 stated: “There is no cap on the emissions that occur within New Zealand.” However, the Ministry for the Environment still regarded the NZ ETS as operating within the cap on emissions established by the Kyoto Protocol for the first commitment period of 2008–2012. Moyes (2008) describes this as a "flexible cap" where New Zealand sourced emissions regulated by the NZETS are constrained only by the international market price for GHG emissions. Greenpeace noted that the proposed NZ ETS placed no limit on the number of permits that could be imported into New Zealand and it did not include a domestic emission reduction target. Greenpeace considered that in operation the NZ ETS would be a carbon tax with the rate set by the world market price. Bertram and Terry (2008, p35) concluded that the NZ ETS is not a cap-and-trade scheme as described in the economics literature because it does not place a cap on New Zealand's emissions of greenhouse gases. Units of trade and international linkage The 2008 NZ ETS created a new emission unit, the New Zealand Unit (NZU), which the Ministry for the Environment described as being the 'primary domestic unit of trade'. The NZU is equivalent to one tonne of greenhouse gases in a one-year compliance period. The NZU is 'backed' by an assigned amount unit. It is the NZUs that will be allocated by 'grandfathering" to forestry, industry, energy, fishing and agriculture under an allocation plan. As noted