An environmentally beneficial method of producing methanol from varied sources of carbon dioxide including flue gases of fossil fuel burning power plants, industrial exhaust gases or the atmosphere itself. Converting carbon dioxide by an electrochemical reduction of carbon dioxide in a divided electrochemical cell that includes an anode in one cell compartment and a metal cathode electrode in another cell compartment that also contains an aqueous solution comprising methanol and an electrolyte of one or more alkyl ammonium halides, alkali carbonates or combinations thereof to produce therein a reaction mixture containing carbon monoxide and hydrogen which can be subsequently used to produce methanol while also producing oxygen in the cell at the anode.