Should Companies That Burn Fossil Fuels Pay a Dividend to Citizens?

If companies that drill for oil or mine coal had to pay a dividend to people who live in the state or province where the drilling and mining occur, would they drill or mine less? As a result, would carbon dioxide (CO2) emissions decrease and help reduce the impact of climate change?

Care2 member Keith McNeill thinks so. McNeill, a Canadian from British Columbia, has hit on the dividend idea as a way to fight the build-up in the atmosphere of the CO2 gases that contribute to global warming. McNeill has launched a Care2 petition asking the leaders of Canada’s six political parties to hold a nationwide referendum to give citizens there a chance to vote on whether Canada should institute a national “carbon fee-and-dividend system.”

Here’s how the system would work: Companies that drill for oil or mine coal would be charged a fossil fuel fee set at $30 per tonne of carbon dioxide released by the fuel in question. McNeill calculates that that fee would generate about $20 billion (Canadian) per year, “enough to give every adult in Canada a fossil fuel dividend close to $1,000 per year.”

McNeill says that the fee-and-dividend approach is similar to a carbon tax, a system that would tax companies for the carbon dioxide they generate. However, unlike a carbon tax, the fees paid would not go into government coffers. Instead, they would be distributed as equal and repeating dividends to every adult.

It’s a bit like the “share the wealth” system already in place in Alaska, where in January 2015 nearly every year-round resident received $1,884 in “windfall oil revenue.”

Unfortunately, in Alaska, the system doesn’t work out so well for the environment. State oil revenues pay 90 percent of the state budget, which explains why the state’s Congressional delegation and most local elected officials are so pro-oil. But oil revenue also goes into a Permanent Fund that pays out the windfall dividends to Alaska’s residents every year. The payout began 32 years ago, and is intended to continue indefinitely. Alaskans who have received every one of the 32 previous checks have pocketed the equivalent of $51,345, according to the Los Angeles Times.

McNeill contends that giving Canadians a substantial carbon dividend would also give them “an incentive to make sure that the price on burning fossil fuels remains high and in place.” However, as Alaska’s example has shown, there’s also a worry that it could primarily bolster their financial self-interest in maintaining fossil fuel production to the highest possible degree.

McNeill’s petition is asking that Canadian citizens have the right to vote on whether the fee-and-dividend system should be put in place. You can read more about the idea and the petition here.

Are there other energy issues you care about? You can start your own petition here.





Keith McNeill
Keith McNeill4 years ago

Sarah H., according to this article in Canada's Globe and Mail newspaper, B.C.'s carbon tax has reduced the province's carbon dioxide output by 16% (while output of the rest of Canada has gone up by 3 per cent.

At the same time, B.C.'s economy has slightly outperformed the rest of Canada.

Sarah Hill
Sarah Hill4 years ago

This idea is just going cut jobs and make products cost more.

Biby C.
Biby C4 years ago

I think the root of the problem is us. We use electricity like it's a free gift from the heavens, we drive petrol guzzling monsters, we keep mega-manufacturers going by buying unnessarily, we go gaga over tacky cities like Las Vegas and a host of other bad habits that give them a reason to extract every drop of oil from the planet! We seriously have to curb our bad habits before it's too late!

Jennifer H.
Jennifer H4 years ago

People should not be paid; it should go to the environment and wildlife. But not in the for of USFWS.

Jo S.
Jo S4 years ago

Thank you Diane.

Emily a
Emily M4 years ago

i signed! this is a great idea. :)

Carole R.
Carole R4 years ago


Stardust Noel
Past Member 4 years ago

Petition signed

Keith McNeill
Keith McNeill4 years ago

Diane MacEachern, I believe the concerns you express in this blog posting about my petition for a Canada-wide carbon fee-and-dividend are unfounded. Human nature dictates that people would want their dividends to be as high as possible, even if it meant crippling the fossil fuel industry (which is our objective, after all).

The LA Times story you link to in your blog posting demonstrates what I am talking about. The story is about protests by Alaskan residents against moves by Alaskan politicians to lower taxes on the oil companies. The politicians want to stimulate oil production. The residents fear lower taxes will mean lower dividends to the population.

Carbon fee-and-dividend offers the fastest, surest and best way to control carbon dioxide going into our atmosphere. All it takes is enough people behind it to stimulate our governments to act. I believe that my petition for Canada is a step in that direction.

Leanne B.
Leanne B4 years ago

Thank you.