4. Carbon Emissions—Financial ImplicationsJAMES SHAW (Co-Leader—Green) to the Prime MinisterCarbon Emissions—Financial Implications4. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by his statement that each generation bears its own burdens"?Rt Hon BILL ENGLISH (Prime Minister): Yes I do and I quite like the ring of that statement. But I stand by my full statement which was in reference to raising the superannuation age: "Each generation bears its own burdens. Any number of 60-year-olds can tell you how devastating it was to have 18 percent inflation when they were trying to save a dollar back in the early 80s." People can argue for a shorter or longer transition. I am sure that discussion will go on. James Shaw: Can he confirm that between 2021 and 2030 New Zealanders will be faced with a $14.2 billion liability to pay other countries to reduce their climate pollution so that we do not have to?Rt Hon BILL ENGLISH: Firstly no I cannot confirm that and I do not think anyone can. There is a range of estimates for the cost of changing the climate. Bear in mind that whatever that estimate says that is what it represents—a cost of changing the climate. As the member will well know because his party helped initiate it the emissions trading system is a mechanism by which we find the least costly way of changing the climate so we are likely to see some purchase of carbon credits—perhaps offshore—as well as mitigation occurring in New Zealand as is happening now because people pay the carbon price right now.James Shaw: Well why then did the National Government allow climate pollution to rise 19 percent under its watch during which period of time the emissions trading scheme has been in place when it knew that it would cost future generations billions of dollars to offset that pollution?Rt Hon BILL ENGLISH: First I do not accept the member's assertions but secondly he seems to forget the history of his own party when it was kind of partially in Government in the early 2000s. When faced with the choices—the policy choices—the Green Party was a strong advocate of the emissions trading system and rightly so. It is the best mechanism for ensuring that we face the cost of climate change and that those costs occur in the most efficient manner across our community.James Shaw: Does he accept that plans to open new coalmines on the West Coast and drill for more deep-sea oil and gas will increase climate pollution and therefore the financial liability faced by future generations to offset that pollution? Rt Hon BILL ENGLISH: No. The point of the emissions trading system is that if the oil or gas pays the price and the consumer has to pay more for it then that will encourage and incentivise the development of non-fossil fuels. But if those technologies do not exist yet or they are still too expensive then the use of the fossil fuels is still the right outcome for now and I thought the member would understand that because his party was a strong advocate of the emissions trading system which is based on price not rules. James Shaw: Well does he agree with his Government's officials that paying other countries billions of dollars to offset New Zealand's pollution represents "a significant transfer of wealth overseas"? Rt Hon BILL ENGLISH: No I do not necessarily agree with officials about that because they need to keep sight of the purpose of the emissions trading system—which has enjoyed multiparty parliamentary support now for well over 10 years—which tells us that if you pay the price for carbon that helps us find the most efficient means of changing the climate. If buying credits from others is the most efficient way of doing it then that is what people will do. James Shaw: Does he think that it is better to pay other countries $14 billion to stop polluting so that we do not have to or to invest $14 billion to create a low-emission high-value economy right here in New Zealand? Rt Hon BILL ENGLISH: I think the member is now simply misusing the number. I mean it is an estimate for a start. Secondly it is not about whatever billion dollars being paid overseas; it is actually the economic cost of changing the climate and the Greens need to accept there is an economic cost—it does not come free. If it turns out to be $14 billion that is quite a bit and let us hope that it is shared fairly and efficiently across the economy. But it is simply wrong to use that number as a description of the amount of money that would be paid overseas for credits."