Carbon Fee and Dividend Explained


Carbon Fee and Dividend is the policy proposal created by Citizens’ Climate Lobby (CCL) to account for the costs of burning fossil fuels. It’s the policy that climate scientists and economists alike say is the best first step to reduce the likelihood of catastrophic climate change from global warming.

Our carbon fee and dividend proposal works like this.  

  1. A fee is placed on fossil fuels at the source (well, mine, port of entry). This fee starts at £10 a per ton of CO2 emitted, and increases steadily each year by £7 so that clean energy is cheaper than fossil fuels within a decade.
  2. All of the money collected is returned to British households on an equal basis. In U.S. studies of this policy,  about 2/3 of all households would break even or receive more in their dividend checks than they would pay in higher prices due to the fee, thereby protecting people on low incomes. [1].

A predictably increasing carbon price will send a clear market signal which will unleash entrepreneurs and investors in the new clean-energy economy.


Here is a link to the U.S. version of the carbon fee and dividend proposal [2]

  1. Dividends”. Last modified: February 12, 2015. The Carbon Tax Center.
  2. The Citizens’ Climate Lobby. “CCL draft legislation for Carbon Fee and Dividend.”