Paying dividends to all isn’t rocket science. The state of Alaska has been doing it since 1982. That’s when the Alaska Permanent Fund, the brainchild of Gov. Jay S. Hammond, a Republican, began to pay dividends from oil royalties based on the principle that the state’s natural wealth belonged to all its people. Residents claim their dividends by filling out an online form. Not surprisingly, the Alaska Permanent Fund is permanently popular among Alaskans. From 1982 through 2009, the fund paid out $17.5 billion. The biggest payout, by the way, came under Gov. Sarah Palin.

The main difference between Alaska’s fund and the one Mr. Van Hollen is proposing is that instead of creating an incentive to pump more oil, his legislation creates an incentive to burn less oil and other carbon-based fuels.

The number of permits initially would be capped at the level of our 2005 carbon dioxide emissions. This cap would gradually ratchet down to 80 percent below that level by 2050. Prices of fossil fuels would rise as the cap tightened, spurring private investment in energy efficiency and clean energy. Energy companies would pass the cost of permits to consumers in the form of higher fuel prices. But for most families, the gain in carbon dividends would be greater than the pain. In fact, my calculations show that more than 80 percent of American households would come out ahead financially — and that doesn’t even count the benefits of cleaner air and a cooler planet.

As the cap tightened, prices of fossil fuels would rise faster than quantity would fall, so total revenues would rise. The tighter the cap, the bigger the dividend. Voters not only would want to keep the policy in place for the duration of the clean energy transition, they would want to strengthen it.

The net effect on any household would depend on its carbon footprint — how much it spent, directly and indirectly, on fossil fuels. The less carbon it consumed, the bigger its net benefit. But why would a vast majority emerge as winners?