Although there were some dubious carbon credits traded in the past, it is an over-generalisation to say they were all fraudulent, a carbon trader says.
A report from the Morgan Foundation says carbon credits bought from other countries to offset rising New Zealand emissions since 1990 were often fictitious.
It argued that one type of credit (the Emission Reduction Unit) was overcome by fraud and corruption in Ukraine and Russia - these were labelled 'hot air' credits.
Another type of credit which had problems were the Certified Emissions Reductions (CER), the unit issued under the Clean Development Mechanism from the Kyoto Protocol.
Some CERs were banned in New Zealand in December 2011, and the rest of the CERs and all ERUs were banned in 2012.
Auckland broker OM Financial's Nigel Brunel said even then it was a very sweeping statement to say almost all of the credits were fraudulent.
"So I think there's definitely an argument that some were dubious and I think you could look further and say some were not where they were supposed to be, but I think it's a pretty sweeping statement."
The Emissions Trading Scheme was still a viable way to reduce emissions, he said.
"Blaming the ETS is like blaming a gun for murder, let's get straight here, it's the levers and the settings of the ETS that have failed it - these settings should be changed and will be changed because it's now all about the Paris Agreement from 2020 onwards.
"All these [Emissions Reductions Units] talked about in [the Morgan Foundation's] report don't even exist anymore - even with the government, that game is all over."
"In hindsight, yes, we believe they should have restricted it in some way, but they didn't."
"The reality is that local market and the local price collapsed, but let's be clear about that - the government didn't set the price for international units, the market did.
"We had a global financial crisis that saw emissions drop dramatically globally during that period, and there was an oversupply of carbon credits in that system, which was a politically created market."
"Domestic carbon credits were unloved, and continued to stockpile, and the price dropped, and people stopped planting trees."
Labour Environment spokesperson David Parker, who was the architect of the ETS, said the National-led government was slow to act on the use of fraudulent foreign carbon credits.
"Labour has been calling on the government to close down overseas trading in 'hot air' carbon credits from the likes of the Ukraine since 2012.
"National knew there was a problem, caused in part by the lack of a successor agreement to Kyoto, but wilfully refused to fix it."
Climate Change Minister Paula Bennett said she had not seen the Morgan Foundation report, but was aware of previous statements the Foundation has made about international units.
She said New Zealand made the best decisions it could based on the rules at the time.
Mrs Bennett acknowledged the Emissions Trading Scheme was not perfect, which was why the government was reviewing it, she said.