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James Hansen and the Climate-Change Exit Strategy


Humanity is not a bunch of lemmings marching unstoppably toward a cliff. There is such a thing as free will…. People please wake up! For the sake of young people, future generations, and other life on our planet, don’t settle for what some “experts” say is the best we can do.

—James Hansen1

The Climate Cliff

The world at present is fast approaching a climate cliff. Science tells us that an increase in global average temperature of 2°C (3.6° F) constitutes the planetary tipping point with respect to climate change, leading to irreversible changes beyond human control. A 2°C rise is sufficient to melt a significant portion of the world’s ice due to feedbacks that will hasten the melting. It will thus set the course to an ice-free world. Sea level will rise. Numerous islands will be threatened along with coastal regions throughout the globe. Extreme weather events (droughts, storms, floods) will be far more common. The paleoclimatic record shows that an increase in global average temperature of several degrees means that 50 percent or more of all species—plants and animals—will be driven to extinction. Global food crops will be negatively affected. For example, a 2011 report of the National Resource Council indicates that the U.S. corn (maize) crop, which accounts for 40 percent of the world’s total, will experience a 25 percent decline in average yield with a 2°C rise in temperature.2

A 2°C increase in global average temperature is associated with the emission of about one trillion metric tons of cumulative carbon emissions since the Industrial Revolution.3 A total of 566 billion metric tons of carbon have already been added to the atmosphere due to fossil fuel combustion, cement production, and land cover change since 1750. This sets up a carbon budget—the remaining tons of carbon that can be released without reaching the trillion metric ton mark—of less than 500 billion metric tons. Based on the record of emission rates over the last two decades it is estimated by climate scientists at Oxford University (associated with the website trillionthtonne.org) that we will emit the one-trillionth metric ton in twenty-eight years (this reflects a recent recalibration of the methodology resulting in a two-year reduction in the estimated timeline). We could, it is calculated, avoid emitting the trillionth ton if we were to decrease carbon emissions from this point on by about 2.4 percent a year. A truly safe response would require a drop in carbon emissions at more than twice that rate. The longer we wait the steeper the reductions will need to be.4

Today’s climate science tells us that even aiming at keeping the rise in global temperature below 2°C is extremely risky, since approaching anywhere near 2°C is inviting irreversible change—i.e., a point of no return with the climate-change process spiraling out of human control. According to the National Resource Council, “Climate changes that occur because of carbon dioxide increases are expected to persist for thousands of years.”5 Kevin Anderson and Alice Bows, at the Tyndall Centre for Climate Change Research at the University of Manchester, argue that 2°C no longer constitutes the threshold of “dangerous” climate change, as was originally thought by the Intergovernmental Panel on Climate Change (IPCC), but rather—in the face of indications of increased climate sensitivity such as a much faster melting of Arctic sea ice than predicted—now stands for the threshold of “extremely dangerous” climate change.6

In response to this planetary emergency, 140 nations have agreed, at least in principle, to a goal of staying below the 2°C threshold.7 So far, however, all attempts to reduce carbon dioxide emissions, including the Kyoto Protocol and subsequent climate negotiations, have been a dismal failure. Carbon emissions continue to rise in every part of the world, and notably in those countries that have been most responsible historically for carbon releases: the developed countries. Current climate agreements—mere promises usually based on cap and trade or the creation of a carbon market—have proven ineffective and, would, even if lived up to, take the world well beyond the 2°C boundary. So bankrupt is this general approach, in fact, that James Hansen, director of the NASA Goddard Institute for Space Studies and the world’s foremost climate scientist, has said that these climate agreements are not worth the paper that they are written on, since they will guarantee a disastrous outcome.8

Given that it is cumulative carbon emissions that matter, the goal has to be to keep fossil fuels in the ground, not simply to slow their use as in most current strategies. A complete transition away from fossil fuels is necessary within a few decades. The question is how to construct an exit strategy that will accomplish this.

Hansen’s Exit Strategy

It is Hansen who has provided the starting point for a realistic climate-change exit strategy aimed at keeping the increase in global average temperatures well below 2°C. He proposes the creation of a “fee-and-dividend” system whereby fossil-fuel companies would be charged an easily implemented carbon fee imposed at the well head, mine shaft, or point of entry, with 100 percent of the revenue collected being distributed monthly to the population on a per capita basis as dividends, with up to two half shares for children per family. Dividends would be sent directly via electronic transfers to bank accounts or debit cards. The carbon fee would be a single, uniform number in the form of dollars per ton of carbon dioxide that would be emitted from the fuel. The carbon fee would then gradually and predictably be ramped up so as to achieve the necessary carbon reductions. Accompanying this would be the elimination of the current subsidies to the fossil-fuel industry.

In testimony to Congress in 2009, Hansen estimated that, based on 2007 data, the adoption in the United States of a fossil-fuel carbon fee of $115 for every ton of carbon dioxide emitted from fossil fuel (equivalent to a $1 increase per gallon of gasoline, or about 8 cents per kilowatt hour in electricity charges) would generate $670 billion in dividends. Each adult “legal resident” would receive one share equal to $3,000 a year. A family with two children would receive around $9,000 a year, with $750 a month deposited into its bank account. Attempts by energy companies to raise the prices of fossil fuels for end users in response would decrease demand for fossil fuels while encouraging innovation in alternative energies. Some 60 percent of the population would receive net economic benefits, i.e., the dividends they received back would exceed the increased prices paid.9 These net benefits would of course increase if they were to reduce their carbon footprints further.

“Economic modeling for the U.S.,” Hansen has stated, “shows that [even] a mere $10/tonCO2 fee, rising $10 each year, would reduce emissions 30 percent after a decade—more than a factor of 10 greater than the oil carried by the proposed Keystone XL pipeline, rendering that pipeline superfluous.”10 All of those with less than average carbon footprints, including the vast majority of the population, and particularly the poorer sectors of the population, would experience net monetary gains. Since this is a fee imposed on fossil-fuels companies, themselves among the biggest users of fossil fuels, it would give them the maximum incentive to develop alternative energy sources and keep the fossil fuels in the ground.

Hansen’s plan crucially insists that all of the revenue from the carbon fee go straight to the public instead of governmental agencies, which he considers “virtual arms of the fossil fuel industry.” The relatively minor costs of administering the plan could presumably be paid for out of the federal government’s general fund—as is the case, for example, with the entirety of military spending. He therefore advocates the population adopt the rallying cry “100% or fight!” This is to ensure that the redistributive nature of the proposal remains intact, guaranteeing popular support for the change.11

The class aspect of Hansen’s proposal is crucial. Under fee and dividend, he declares, “Low-income people can gain by limiting their emissions. People with multiple houses, or who fly around the world a lot, will pay more in increased prices than they obtain in the dividend…. If the funds are distributed 100% to the public, the public will allow the fee to rise to high levels, in contrast to the relatively ineffectual carbon price characterizing cap-and-trade or a pure carbon tax.”12 The Congressional Budget Office estimated in 2007 that the carbon footprint of the top quintile of the U.S. economy was more than three times that of the bottom quintile. Likewise the Carbon Tax Center reports that in 2005 the top quintile accounted for 32 percent of total gasoline consumption in the United States, while the bottom quintile account for 9 percent. Hence, the carbon dividends distributed on a per capita basis to the population would mean in effect a redistribution of income from the top quintiles with above average carbon footprints to the bottom quintiles with below average carbon footprints.13

The advantage of Hansen’s fee and dividend from a climate-change standpoint is that it is directly aimed at making the fossil-fuel companies—those who take the fossil fuels out of the ground—pay, while increasing the price of carbon to decrease consumption in every nook and cranny of the economy. It also makes it possible to raise carbon prices to the extent required for a rapid phase out of fossil fuels, while garnering the necessary mass support. “The public will only allow an adequate rising price on carbon,” he contends, “if the system is simple and transparent with the proceeds distributed to the public.”14

Writing for the Nation in 2010, economist Charles Komanoff of the Carbon Tax Center argued that the strength of the fee-and-dividend approach was twofold. First, it “would turn the proceeds of these higher energy costs over to the American public to spend as they wish, rather than to corporate emitters to fatten their bottom lines or to Washington lawmakers to lavish on pet projects. Under fee-and-dividend, each and every American would receive a monthly check, which for most people would offset the higher energy prices caused by the fee.” Second, it would be far superior to the murky carbon price produced by cap and trade, which is set by “a vast trading market and determined by fluctuating factors like the economic growth rate, consumer and producer price elasticities and hedge bets by speculators”—and then further undermined by offsets. The conservative corporate-connected and corporate-funded big environmental groups, such as the Environmental Defense Fund, the Natural Resources Defense Council, and the Pews Charitable Trust, Komanoff points out, prefer cap and trade because of its corporate-friendly character, while fee and dividend appears more popular with grassroots environmental groups. The differences between cap and trade and fee and dividend in terms of simplicity and transparency were dramatized by the bills being considered in Washington in 2009–2010. The carbon-fee bill presented to Congress by Connecticut Democrat John Larson was a mere twenty-one pages long, as opposed to the main cap-and-trade bill being considered by Congress which ran to over 1,500 pages. Yet, emissions reductions under the carbon-fee bill would have been two or three times as great.15

An increased carbon tax through the fee-and-dividend plan is the chief element in Hansen’s climate-change exit strategy, but the overall strategy that he proposes is much wider than this would suggest. Crucial to this approach is the notion that crude oil production (conventional oil based on reserves as estimated variously by the IPCC and the U.S. Energy Information Administration) will peak before mid-century. Based on such assumptions, Hansen and his coauthor Pushker A. Kharecha demonstrated in a 2008 article in Global Biogeochemical Cyclesthat the burning of the remaining conventional oil and gas is consistent with climate stabilization at or below 2°C (450 ppm atmospheric CO2). But this is true only if accompanied by a phase out of coal-fired plants without carbon capture and sequestration technology (a technology which is not yet feasible), and provided there is no recourse to unconventional fossil fuels—such as tar sands oil, shale oil and gas, and methane hydrates. Hansen considers coal and unconventional fossil fuels as “death trains,” not only because these are the dirtiest of fuels, but also because their use will break the carbon budget. Canada’s tar sands, he says, contain 240 gigatons of carbon while U.S. shale contains a further 300 gigatons. If we burn it all on top of conventional fuels there is no hope of avoiding the planetary tipping point.16

The Hansen strategy hopes for a massive transformation of energy infrastructure. He supports Al Gore’s call, issued in 2008, for the building of a carbon-free energy infrastructure in the United States. Nevertheless, Hansen recognizes that a massive shift in infrastructure would take decades. In the meantime, therefore, direct carbon conservation—the limiting of consumption through conservation techniques of reducing, reusing, recycling, and rationing (putting this ahead of immediate economic considerations)—becomes even more important.17

Another key element in the Hansen climate-change exit strategy is to carry out a global transition in “farming and forestry practices” in order to “enhance carbon retention and storage in the soil and biosphere,” including global reforestation. This could generate an “anthropogenic drawdown of atmospheric CO2.” Power plants can move toward burning biofuels if they use carbon capture and sequestration technologies and provided it is not at the expense of food crops and tropical forests, relying instead on “agricultural waste, natural grasses, and other cellulosic materials.”18 (However, it should be added that there are legitimate concerns—overlooked by Hansen—about burning agriculture “waste” which in most cases should be returned to the soil to cycle nutrients and help maintain its fertility. It also makes more ecological and energy sense to use natural grasses to feed cattle and other ruminants, instead of corn and soybeans.)

In addition to recommending various forms of alternative energy as replacements to fossil fuels, Hansen also advocates a potential fourth generation of nuclear power—provided that the dangers of this form of energy can be substantially reduced. Faced with a dire choice between certain planetary catastrophe without a shift from fossil fuels, and a shift to nuclear power with its attendant dangers, Hansen has cautiously insisted on the need to pursue technological possibilities that may emerge with respect to the latter. In the future, nuclear power could be, he writes, “one viable alternative option, if strict provisions are followed for public safety, waste disposal, and elimination of potential weapons-grade by-products.” However, since fourth generation nuclear power is not developed yet, and since it takes seven-to-ten years to build a nuclear power plant, this does not loom overlarge in his strategy.19 He has, however, rejected geoengineering solutions, such as sustained stratospheric sulfate aerosol injection, as involving “long-term risks to climate and ocean/stratospheric chemistry.”20 Finally, Hansen insists on the need to work intensively at reducing non-CO2 atmospheric forcings, such as those related to methane, tropospheric ozone, and black carbon.21

Hansen is not only the world’s foremost climate scientist, but also a leading climate activist. He has been arrested in an attempt to block coal-fired plants and in a protest over the Keystone XL pipeline designed to bring Alberta tar sands oil to the Gulf of Mexico. His activism, and willingness to be arrested in relation to these issues, shows what he considers to be essential. With peak crude oil approaching, the world’s proven conventional oil and natural gas reserves could all be burned while conceivably keeping global average temperatures below 2°C. Nevertheless, if we go too far into coal supplies and encourage tar sands production, the “game,” Hansen contends, will be “over.” The goal therefore must be to stabilize emissions around peak conventional oil and natural gas production, before major inroads are made into the use of the remaining coal reserves and unconventional fossil fuels. The greatest failures of the Obama administration so far, in his view, are its continued support of coal-fired plants, its backing of Canadian tar sands production, its likely approval (delayed so far only by environmental protests and the 2012 elections) of the Keystone XL pipeline, and its refusal to push for carbon fee and dividend—in that order. For Hansen blocking the burning of coal and unconventional fossil fuels is essential if any chance of climate stabilization is to remain possible, and thus he calls for mass mobilization and citizen action. There is no other way given the power of the fossil-fuel industry.22 A mere increase in the carbon price is insufficient where coal and unconventional fossil fuels are concerned, and actual bans are necessary.

Hansen has lobbied governments throughout the world to introduce a fee and dividend system. Given that Washington and other capitals of the G-8 are governed by the fossil-fuel industry and “big money,” Hansen doubts that the core economies of the world capitalist system will move first in adopting such a system. In fact, Canada, the United States, and Norway are all involved in the expansion of tar sands production. With the United States unwilling to act, world leadership in this area increasingly falls on China which, he believes, represents “the best hope.” China is now the world leader in non-carbon energy investments, such as “nuclear, wind, and solar power.” Yet “these carbon-free energies,” Hansen writes, “will supplant fossil fuels, in China and the world, only when a rising carbon fee forces fossil fuels to pay their costs to society. No nation will impose an internal fee that seriously disadvantages itself in international commerce. But an internal fee-and-dividend system, with a modest initial carbon price, will be a boon to the nation that leads, and provide a framework for international discussion.” Current World Trade Organization rules allow a nation that imposes a carbon fee to levy duties on products from other nations that do not have a carbon equivalent fee or tax, making it relatively easy to generate a global carbon fee/tax system.

Hansen insists China does not have the same moral responsibility to take the lead on climate change, as do the United States, Russia, Germany, and the United Kingdom—the countries with the largest cumulative carbon emissions. The United States is responsible for 27 percent of the cumulative, historical carbon dioxide emissions, while China, with three times the population, is responsible to date for only about 10 percent.23

China and other emerging economies are growing in large part due to the global labor arbitrage (and to some extent environmental arbitrage) whereby the rich capitalist countries are via multinational corporations increasingly transferring their production and their environmental costs to poor and emerging economies.24 A major issue in today’s carbon debate thus has to do with embodied carbon in international-trade goods and the locus of global consumption of these goods. One effect of the global shift in production is to transfer the carbon emissions associated with goods consumed in the global North to the global South.

A 2008 study by Jiang Kejun, director of the Energy Research Institute of China’s National Development and Reform Commission, its main macroeconomic planning agency, indicates that the balance of emissions embodied in trade—or, BEET, defined as “embodied carbon emissions in exports less embodied carbon emissions in imports”—expressed as a percentage of total domestic-production-based emissions, is almost invariably negative within the global North. Thus the balance of carbon emissions as a percentage of total domestic carbon emissions is: Switzerland -123 percent; United Kingdom -17; Germany -16; Japan -15; and the United States -7—indicating that these countries are net carbon importers and that their domestic carbon emissions understate their carbon footprints. While the inverse naturally holds for major emerging economies, where the corresponding figures are: South Africa, 38 percent; Indonesia, 19; China, 18; India 7; and Brazil 1—indicating that these nations are net carbon exporters and that their domestic carbon production overstates their carbon footprints.25 Although there is naturally considerable debate in different studies about the percentages applicable to each country, there is no doubt that the shift of manufacturing toward the semi-periphery and periphery of the world economy, coupled with the continued concentration of manufactured-goods consumption in the center, has meant that the richest economies have to a considerable extent succeeded in externalizing their carbon emissions to poor and emerging economies, which are then left holding the tab where emissions reductions are concerned.26

This, too, lessens the direct moral responsibility of China and other large emerging economies to cut their emissions, relative to the economies at the center of the system. Given centuries of unequal exchange, and the fact that half the population of the world contributes virtually nothing to global emissions, primary responsibility still lies with the countries at the center of the system—which, as the richest countries, are in the best position to act.27

Nevertheless, China is today the leading carbon emitter and is also especially vulnerable to the effects of climate change. “Carbon dioxide amounts of 400 ppm (parts per million), expected in 2016 with current emissions,” Hansen states, “will cause an eventual sea level rise of about 25 meters. China’s land area will shrink greatly, requiring about 250 million people to move inward.” Unlike the rich capitalist economies of the West, China’s government is less dominated, he contends, by fossil-fuel interests, which of course exist but “do not rule the roost.” It is more capable of charting a rational course that adopts a “long view,” and is able to “implement policy decisions rapidly.” Clearly, its ability to plan and promote a strategic vision gives it capabilities that the fossil-fuel and finance-driven governments of the West lack. Referring to a high-level presentation that he attended in Beijing, Hansen noted that the Chinese approach was “epitomized by Dr. Jiang Kejun” at the Beijing Forum.

Jiang Kejun laid out sector-by-sector projections of transitions to low-carbon and no-carbon energies and improved energy efficiency that would allow CO2 emission growth to be slowed and then reversed over the next few decades. Technology development is supported, and, when lower carbon technology becomes available, efficiency standards are promptly ratcheted…[so as to reduce CO2 emissions per unit of output]. Most encouragingly, there is recognition that this strategy requires a rising carbon price for most successful results. The Chinese authorities appear to grasp that rapid attainment of the tipping points at which clean energies quickly displace dirty energy requires an economic incentive.28

Hansen insists that given its low level of cumulative, historical emissions and its low per capita carbon emissions China (along with other emerging countries) will not accept a carbon cap system. However, a carbon tax is currently being considered in China, the implementation of which is anticipated before the end of the current five-year plan.29

The significance of Hansen’s approach to climate change, beyond his grasp of climate science itself, derives largely from his class analysis, his populist frame, his internationalism, and his dire realism. This has led him to promote fee and dividend as the only feasible approach for getting carbon emissions down rapidly. Without a much higher carbon price that reflects the real cost of carbon dioxide (including its environmental costs), there is no hope of avoiding disaster given the nature of the prevailing social/economic system. And there is no possibility of instituting an effective carbon price without an approach that takes into account class and power inequalities, and basic issues of justice. Criticized for the fee-and-dividend plan’s redistributive character, which would increase the buying power of the poor who would supposedly “waste the dividend,” Hansen replied: “I come from a low income family, my father a tenant farmer educated to 8th grade, with seven children. We would not have wasted the money. Nor would most low income families.” Subjected to criticisms of his plan from the New York Times and Paul Krugman, Hansen shot back, explaining that “the Times tends to favor mainstream environmentalist ideology.” For him the block to effective political action in the United States and other moneyed-democracies ruled by “fossil fuel kingpins” is “the corrosive influence of money in politics…aided by corporate-dominated media.” With respect to China, Hansen emphasizes over and over again that the West’s “historical energy profligacy, versus China’s energy penury,” has given the former no moral basis with which to criticize China on this score. And since China and other developing countries will not accept a cap on emissions, the only global approach that will work, he argues, is a carbon fee or tax. In other words, a feasible strategy has to take into account not only the class but also the imperial legacy of the system.30

Capitalism’s Ecological Footprint: Beyond Hansen’s Exit Strategy

Hansen’s climate-change exit strategy represents what is clearly a calculated attempt to push through the maximum plan that the regime of capital could conceivably accept, and the minimum necessary to avoid complete disaster. It represents a heroic effort to promote the formation of political-economic conditions that will prevent the world from crossing a catastrophic climate tipping point. In fashioning his exit strategy Hansen says little or nothing about the world’s other immense environmental challenges, despite the fact that he is the coauthor of major scientific publications on the crossing of multiple planetary boundaries—signaling a planetary environmental crisis that extends beyond global warming to other critical areas as well. In addition to climate change, the world has already crossed critical planetary boundaries (removing it from Holocene-epoch conditions) with respect to nitrogen use and species extinction, and is on the brink of crossing similar critical planetary boundaries for ocean acidification, freshwater shortages, and landcover change.31 Nor does Hansen’s climate-change exit strategy address the question of capitalism and the accumulation imperative that drives such a system, which has obvious implications for any long-term strategy of climate or environmental stabilization.

The main goal at present, Hansen stresses, is simply to see if we can head off climate catastrophe before the die is cast, through the combination of a steadily rising carbon tax, conservation, new technology and infrastructure, and global reforestation—together with the closing of coal-fired plants and preventing the use of non-conventional fossil fuels such as tar sands oil and shale oil and gas. Hansen has left it to others, such as Bill McKibben with his “Do the Math” tour movement (modeled after the disinvestment campaign against Apartheid), to go after the fossil-fuel industry directly, campaigning to disinvest in fossil fuels on the carbon-budget grounds that we cannot afford to burn more than 20 percent of the fossil fuels currently economically available.32

Hansen’s climate-change exit strategy thus has definite limitations. Despite its progressive features it is mostly a top-down, elite-based strategy of implementing a carbon tax with the hope that this will spur the introduction of necessary technological changes by corporations. To be sure, Hansen stresses the democratic nature of the plan, and has argued that Obama could have mobilized the population around such a tax at the height of his popularity in his first term through a series of fireside chats.33 He also suggests that the 100 percent redistribution element in the fee-and-dividend strategy must be backed up by the threat of the wider public to “fight” if this is interfered with. And he has himself joined in mass mobilizations against coal and tar sands oil. Yet, his plan includes no call for a general ecological-cultural revolution against the U.S. power structure. Hansen is silent on the enormous resources directed at the military with its vast carbon footprint. He has not questioned the wars over oil; there is no mention of Iraq in his book. In general, direct conservation initiatives, which would require widespread mobilization, on the scale needed, are downplayed. Most of all, he avoids the question of whether climate stabilization, much less ecological stabilization, is compatible with a system of exponential capital accumulation ad infinitum—leaving the real task of carrying out the necessary social change to cope with the environmental problem as a whole unaddressed. If he hopes his strategy will unleash a wider, mass-based ecological and social revolution he refrains from making this explicit.

It is important to recognize that Hansen’s reliance on a steadily increasing carbon price will only really work if it is universalized in the global economy. Any decrease in demand for fossil fuels that is based on purely locally generated price increases, e.g., through the imposition of a carbon tax, will lead—if the same amount of fossil fuel as before is supplied by oil producers—to a drop in global price. Under these conditions, far from decreasing global demand for fossil fuels, the result would simply be to stimulate fossil-fuel consumption elsewhere in the world economy.34 By the same token, an increase in global carbon price not big enough substantially to reduce demand and not to be followed by other predictable price increases could actually stimulate—as we have already seen—the production of dirtier fossil fuels, such as tar sands oil. All exclusively market-based strategies tend to backfire, since they rely principally on economic incentives. Hansen’s fee and dividend is necessary under present conditions but is only a single wedge in what must be a much more comprehensive climate-change exit strategy.

More important, Hansen’s analysis relies on a degree of technological optimism that assumes a higher carbon price will stimulate new technologies, resulting in massive decarbonization of the economy—without fundamentally altering the nature of the economy itself, and without limits on economic growth. This technological optimism is particularly evident where the case of China is concerned, which he sees as “the best hope.” There the high-stakes gamble is a hyper-technological one, coupled with very rapid growth of 7 percent or more—with a carbon tax hopefully nudging the economy onto a low carbon path. The high-growth rate itself makes it highly improbable that China will be able to reach its targeted peak emissions by 2025. China’s great advantage, though, is that with its remaining centralized-planning apparatus it is theoretically still able to restructure its economy in a manner and on a scale that the plutocracies of the West are unable to accomplish—blocked as they are at every stage by corporate interests. Thus it is able to act forcefully on the supply-side as well as the demand-side. Yet, its primary goal of economic growth of 7 percent or above makes the enviro

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