The latest report from the Intergovernmental Panel on Climate Change says that moving completely away from fossil fuels will reduce the amount of money available for household spending by about 0.06% a year over the rest of the century. This means, acccording to the IPCC, that action to stop climate change will cumulatively reduce real incomes by about 5% below what they would have been in 2010. The chart below is from a series produced by DECC. It shows what percentage of total household spending has gone on energy, including both consumption in the home and in personal cars, from 1970 to 2103.
Vehicle fuel expenditure has varied little, swinging between 2.8% and 3.5% of spending. This surprising partly because a far smaller percentage of families had cars in 1970 than today.
Household energy bills have been far more volatile. They took 5.4% of spending in 1982 before falling to a low of 2.1% twenty years later. In 2013 it was 3.3%.
Combined, all sources of energy took 9.3% of consumers’ spending in 1982. The figure in 2013 was two thirds of this number – 6.2% - a reduction of 3.1%. In addition, the cost of the embodied energy in other goods and services will have probably fallen by a similar amount. In other words, if the IPCC is right the net impact of abandoning fossil fuels (about 5% by 2100) will simply return us to where we were in 1982, with the direct costs of energy taking about 9% of household expenditure.