The funny thing about Liberal Party leader Stephane Dion's carbon tax is that it doesn't seem to result in emission reductions.

This despite Stephane Dion's assurance that significant reductions would happen by 2012.

The revenue pulled in from the tax in Year 4 of the plan (presumably 2013) seem to be based on current emission rates, and not significantly reduced rates.

Or even slightly reduced emission rates, to be brutally honest.

You can study the numbers for yourself.

So I was chatting with a newspaper columnist about this oddity.  He said something that flicked on a light for me.  He said the thing about a carbon tax is that you can depend on the revenue even though you can't really predict the emission volume.

What he meant was that the tax could be adjusted up or down as carbon emission fluctuate, but the phrase "you can depend on the revenue" made my eyes pop wide open.

Don't mess around with the tax rate.  Just make sure emissions don't fluctuate.  On purpose!

Follow me on this.  The Green Party revealed their carbon tax plan.  They wanted to shock Canadians with a $50-per-tonne tax applied to everything, including automobile gasoline.  Hit with a big slam like this, Canadians would panic and no doubt dramatically change their behavior.  Those thrown out of work by the shutdown of Canada's manufacturing sector would travel little and eat less, of course.  The others would use what resources they had to carpool, take on second jobs, cut back on anything except eating (and even cut back on that), and so on and so forth.

It would be a disaster, but the goal of cutting emissions would be met.  The ultimate goal of saving the planet is, of course, entirely fictitious, and in any case, utterly unaffected by Canada's paltry contribution to global greenhouse emissions.

Stephane Dion has a different plan.  We can speculate that there would be a Year 0 in which the tax code would be rewritten and new bureaucracies set up to administer the new spending programs.  In Year 1, Canadians who have been girding for this, would start paying the $10-per-tonne tax.  Perhaps stores would have already raised prices in Year 0 in order to help get Canadians used to the jump in prices.  With that slow start, no one would have to leave their cars at home.

Then in Year 2, the tax is set to $20 per tonne.  More adjustments are made so that people could keep driving to their jobs. 

In Year 3, the tax is up to $30 per tonne.  Many people would have been able to get pay raises to compensate for the new cost of living.  Everyone's budgets would again have adapted to the new pricing reality.  Fewer frivolous purchases would be made to ensure that the furnace would keep going through the winter.

And so on.  In Year 4, the Liberals seem to suggest that not changes in emissions are expected, judging from their predicted revenue from the carbon tax.

Are they being conservative in their predictions?

Or is this the point?

Is the whole point of the carbon tax to create new taxation room in the budget of Canadian consumers by slowly ramping up a tax on a hitherto untaxed quantity, this being carbon emissions?

Carbon emissions aren't something that can be easily be avoided.  Sure you can turn down the furnace.  As Stephane Dion told Mike Duffy when Duffy asked Dion what his 80-year-old mother in PEI was going to do, given that her house is already fully insulated, Dion is a flash of sensitivity told Duffy that people should not be running eight TVs and four computers day and night.

I dare say Mother Duffy does not have eight TVs and four computers, and she, like the rest of us, won't be able to modify our behavior all that much.  Much of the carbon tax we pay will be hidden in the increased cost of goods we purchase.

Each year, the cost of goods and services will grow, like a sort of inflation.  We will find ways to do with less spending power, but we'll manage to get by year after year.

We will slowly grow accustomed to the new pricing regime and find ways to maintain a close approximation of our current lifestyles.

That's the real plan.  We don't really alter our behavior.  We adjust it.  We bend here and there.  But by and large we do just about everything the same.  We succeed because the adjustments we make each year are incremental as the tax slowly rises. 

By Year 4, the tax is $40 per tonne.  And yet the Liberals are predicting $15 billion in tax revenue.  My calculations suggest that this can only be right if carbon emissions remain unchanged from Year 1 through Year 4.

This isn't a failure of the carbon tax.  It is the success of the carbon tax.  Tax Canadians in incrementally higher amounts using a tax that is invisible and broadly based.  If the Liberals are lucky, Canadians will succeed at finding ways to pay the tax without eliminating the taxation base (which is energy usage, of course, and really can't be avoided).  The taxation base remains steady as the revenue increased until in Year 4, the Liberals are taking in $15 billion in new revenue.

It's like boiling the frog.

Besides the curious fact that the carbon tax plan does not predict any actual reduction in carbon emissions, you might find it interesting to note that the GST cuts made by the Conservative government cost the government $12 billion in revenue.

That's just about the amount the Liberals are predicting they can get back with a carbon tax.  This is a new GST, designed to slip in quietly, and so that we don't notice until we're all paying those billions back.

We used to be able to pay that extra $12 billion before.  No reason we won't be able to again, just as long as we don't notice it.

It really is a tax trick.