One page 41 of Liberal Party leader Stephane Dion's carbon tax handbook, there is a costing sheet.  It covers Year 4 of the carbon tax timeline, showing $15,342,000,000 in revenue from the tax, and $15,427,000,000 in expenses (income tax cuts, credits for every constituency the Liberals don't want to annoy, and so on).

The revenue is based on a $40/tonne tax.  That means that the Liberals are predicting that Canadians will be consuming 383,550,000 tonnes of taxed fuels for years into Liberal's carbon tax regime.

That's diesel, fuel oil (light and heavy), jet fuel, kerosene, natural gas, propane, and coal.

Do Canadians actually use that much fuel, not including gas for cars?

According to the Encyclopedia Britannica, Canada consumed 840,000,000 barrels of crude oil in 2002.  It takes 7.2 barrels of crude oil to get a metric tonne, so that means in 2002, we consumed about 115,000,000 tonnes of crude petroleum.  Let's assume the number has not changed much in 5 years.

What about coal?  According to Natural Resources Canada, in 2005, Canada consumed 60,000,000 tonnes of coal.

So that's a total of 180,000,000 tonnes of taxed fuels.

That's less than half of the amount predicted by Stephane Dion and the Liberals in Year 4 of their carbon tax plan, a plan that is supposed to encourage Canadians to use less fossil fuels.

And I didn't correct for gasoline, which is not counted in the Liberal carbon tax plan.

OK, so I'm going to try again.  Going to Stats Canada, I studied the tables showing 2007 usage of petroleum products.

I used a density of 0.9 kg/l as an average for all petroleum-based fuels, and using that density and the cubic meter usage, I got 93,000,000 tonnes of petroleum consumed in 2007. 

• 103,431,900 cubic meters in domestic sales
• 0.9 kg/l which is 900 kg/cubic meter or 0.9 tonnes/cubic meter
• 103,431,900 * 0.9 = 93,088,710 tonnes

That's in good agreement with the Encyclopedia Britannica number (a bit low but within spitting distance, recalling that I'm lowballing the density of heavy oil by 10%).  Taking out "motor gasoline" (43,000,000 cubic meters of the total), I get 55,000,000 tonnes of petroleum products.

Add it to the coal figure, and we get 115,000,000 metric tonnes of fuel products that would be taxed in Stephane Dion's carbon tax plan.

Again, that is 30% of the 383,550,000 tonnes of petroleum and coal (excepting gas) that is being taxed in Year 4 of the carbon tax plan.

One more time.  According to this site, in 2007, Canada consumes 2,294,000 barrels of petroleum a day.  That's 837,310,000 barrels a year, or just over 115,000,000 tonnes.  That's dead on the Encyclopedia Britannica figure (which might be that they both sourced their data from the CIA Handbook) and less than 20% off the hand-calculated Stats Canada number I came up with.

What if I put gasoline back in?  Using the 115,000,000 tonne figure, and adding coal, I get 175,000,000 tonnes of carbon-based fuels, or 45% of the tonnage the Liberals are predicting we'd be using in Year 4 of a tax regime designed to punish us for using petroleum and coal.

Why are the Liberals assuming that Canadians are going to double, or even triple, their tonnage of carbon-based fuel consumption even as Stephane Dion cranks up the tax year after year?

What have I done wrong?

[Andrew Coyne thinks the figures on tax-side of the plan are not adding up either.]

First Mistake:  I taxed the tonne of fuel, not the tonnage of carbon in the fuel.  For example, 1 tonne of coal translates to 750kg of carbon content.  Petroleum-based fuels are cleaner.

So what does this do to the numbers?  It makes them worse for the Liberal plan.  How do you get $15,000,000,000 in revenue at $40/tonne of carbon unless the total fuel consumption goes way, way up?   I assumed one tonne of fuel makes one tonne of carbon.  It doesn't.  It maps to 75% or less carbon by weight. 

Addendum:  The Green Party carbon tax plan makes sense!

The bulk of the tax revenue in this system comes from the larger polluters. At $50 per tonne, the tax brings in $40 billion a year to the federal government.

Using my figure of 175,000,000 tonnes of carbon-based fuels, including gasoline (as per the Green Party plan), and correcting for a 70% carbon by weight (as per my "First Mistake"), I get 122,500,000 tonnes of carbon.  Taxed at $50 per tonne, that comes to just over $60 billion in revenue.  The Green Party seems to be underestimating the revenue in their plan, or more likely correcting for what they expect to be a decrease in fuel consumption as a result of their tax.

Their numbers make sense.  Go figure.

Second Mistake: Mecheng might have this right.  If the tax is on emissions and not on carbon, then the weight of carbon dioxide makes up the difference.  Let's say that the 115,000,000 tonnes of non-gasoline fuel translates to 90,000,000 tonnes of carbon (using a carbon weight factor of 80%).  Multiplying by 3.7, you get 330,000,000 tonnes of carbon dioxide, which is in close agreement with the figure used by the Liberals by Year 4 of 385,000,000 tonnes -- actually a bit low.

New Problem: Hey, wait a second.  Here I am backtracking, and instead there is an entirely different problem.  Why are my fuel estimate for 2007 coming in just under the numbers being used by the Liberals for Year 4?

Shouldn't the carbon dioxide tonnage have started dropping a measurable amount by now?

However, more than two wasted years of Conservative government, combined with the message of urgency coming from scientists, means that we must put a price on carbon as soon as possible. Since a cap-and-trade system will take several years to build, we will start with a broad-based, revenue neutral carbon tax that can be implemented quickly and simply, that will cover approximately 75 per cent of domestic emissions. This will allow our economy to immediately begin the needed transition to clean energy, efficiency and low emissions.

The numbers I'm seeing suggest that the carbon tax will also take several years to build, since in the first four years, I don't see any decrease in the carbon emissions from what I figure we're emitting today.

If that's the case, then why not go for a cap-and-trade system, which I've argued makes logical sense (putting aside the global warming hysteria).

Are the Liberals admitting that Canadian fuel rates will remain unchanged even as the carbon tax rises?  That years will go by while emissions remain steady?  Where's the urgency? 

Is this why we don't see figures for Years 1, 2 and 3, just 4?  The Liberals didn't want us to see that they are assuming there is no change in fuel consumption, just new cash flow for a Liberal government?