There’s a string of evidence connecting the environmental crisis to the rising cost of living, starting with the externalities that emanated from the damage created by carbon and pushed out for centuries, now arriving by way of impacts such as the cost of food due to rising temperatures and insurance premiums thanks to climate catastrophes.
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Australia tells itself it is living through two crises. One is about money, rent, groceries, insurance, power; the other is about carbon, and sits, we imagine, somewhere ahead of us or somewhere else.
Kept separate, they compete for attention and for budget, but put back together they describe a single event: much of what households are now paying as a cost of living crisis is the environmental crisis arriving, damage done when the carbon was burned, excluded from its price at the time, and delivered decades later by other routes.
The exclusion even has a name. A century ago, Arthur Pigou described costs that land on people who were never party to the transaction and called them externalities, a word that has always flattered the practice by making a deliberate omission sound small and accidental.
Carbon is the largest of them: its damage begins the moment the fuel burns, yet the right to release it was priced, for two centuries, at zero.
And an excluded cost does not disappear; it waits, compounds, and returns. Home insurance premiums are rising several times faster than incomes; one household in eight is now under premium stress, and whole postcodes are becoming uninsurable (Actuaries Institute, 2024; Climate Council, 2022).
Heat is measurably lifting food prices and is projected to keep doing so (Kotz, Kuik, Lis and Nickel, 2024.
Insured losses from natural catastrophes now run past $US100 billion ($142.75 billion) a year as reinsurers reprice a warming world (Swiss Re Institute, 2024), and beneath it all the brief interval of cheap fossil energy that built the modern economy is closing (Rees, 2020).. None of this is peculiar to Australia; the repricing is global.
It is in this light that the principal response to housing affordability deserves more scrutiny than it has received.
Modelling behind the Australian Reduction Roadmap indicates that delivering the national housing targets with business-as-usual construction would consume roughly twice the country’s entire Paris-aligned emissions budget, every sector included, on that one program.
The census, meanwhile, implies around 13 million spare bedrooms in the dwellings we already have (ABS, 2021). It matters here that building is not a neutral act. Every building is matter and energy rearranged on the surface of the Earth.
Buildings and their construction account for around 37 per cent of energy-related emissions worldwide, and construction draws down roughly half of all raw material extracted globally (UNEP, 2024; European Commission, 2020).
Each new square metre is subtracted from somewhere – a quarry, a forest, a river system, an atmosphere with no margin left. The proposal, in effect, is to relieve the pressure of arriving environmental costs by producing further environmental costs at a scale the budget cannot absorb, while the cheapest and lowest-carbon floor area in the country stands empty behind doors we own.
The instrument is also unsuited to its task. Australian housing has for decades behaved as a financial asset rather than a consumption good, and assets do not obey the supply logic being invoked (Ryan-Collins, 2018)..
Gold is the clearest example: annual production adds less than two per cent to the accumulated above-ground stock, so the price is set by demand for the stock, not by the flow of new supply (World Gold Council, 2024).
Housing increasingly prices the same way. Sydney’s median house now costs around 13 times the median household income, against three or four times in the early 1990s (Demographia, 2024), and the 2021 census counted more than 1 million dwellings, about one in 10, unoccupied on the night (ABS, 2021).
The divergence is not local, and it is not new. For half a century, productivity has climbed while wages have stalled (EPI, 2025), and the world’s net worth has grown far faster than the output beneath it (McKinsey Global Institute, 2021).
That surplus of capital has to be put somewhere, and real estate is where it has been put: two thirds of global net worth now sits in property, most of it residential.
On a materially finite planet, this is what wealth increasingly is: not new capacity but higher prices on what already exists, and housing is where those prices live. Capital seeking a store of value does not respond to supply the way households seeking shelter do, which is how a country can build continuously into a shortage.
Why a society does this, while believing itself serious about both problems, is the question a 2023 paper set out to answer at the level of the species. In Science Progress, a coalition led by Joseph Merz, with William Rees, Phoebe Barnard, Thomas Wiedmann and others, argued that ecological overshoot, the condition of drawing down the biosphere faster than it regenerates, is not fundamentally a technological problem.
It is the symptom of an underlying behavioural crisis: impulses that were adaptive across most of human history, to consume when resources allow, to signal status, to defend territory, now operating inside an economy engineered to amplify them.
They are explicit that it is deliberate: the intentional exploitation of previously adaptive human impulses, located in growth-dependent economics and in a marketing industry that long ago moved from connecting products to needs into manufacturing the needs themselves.
They add that firms and governments also limit the more sustainable option by design or by consequence; the postwar suburb, which made a car a condition of participation, is the built environment’s standing example.
The paper opens with Edward Bernays, a founder of public relations, observing that those who manipulate the habits and opinions of the masses constitute an invisible government.
The machinery he described exists today at a scale he could not have imagined, and it is pointed almost entirely at consumption. Their most contested proposal follows from that symmetry: that the same machinery be turned toward survival. They close by calling for research into the many dimensions of the crisis they name; further work from the group is under way, and it will be worth reading when it arrives.
The capture extends to the conversation itself. Speaking on this masthead’s podcast recently, Jess Miller, Deputy Lord Mayor of Sydney, argued that the climate conversation should largely stop, because “unless you’re in a privileged position where you might be able to do something about it, like get solar panels or buy an EV” the subject only alienates. She is right about the alienation, and these current ‘cures’ only serve to further this.
The exhaustion is not with the climate but with a framing that sold sustainability as a purchase. To be sustainable is the most natural thing there is; every other organism manages it as a condition of staying alive. We forgot, and the market stepped into the forgetting, selling the capacity back as product: panels, batteries, the electric car. That framing is textbook discounting: for anyone who cannot buy, the problem recedes, later, elsewhere, someone else’s.
It may even be tactic, since a conversation that ties action to a product licenses most people to leave it. The remedy is not silence but education, and not only for the priced-out; those who can buy need it just as much, because the answer was never something you buy.
The same paper identifies the mechanism underneath all of this. Humans, Merz and colleagues write, are innate temporal, social and spatial discounters, and it was fossil energy that allowed the species to delay and evade the consequences of surpassing natural limits.
The psychologists Yaacov Trope and Nira Liberman describe the same tendency with more precision: we engage concretely with what is near and abstractly with what is far, across four dimensions of psychological distance, time, space, social relation and probability.
Climate change is perceived as distant on all four at once. Building emissions may be the purest case of that geometry anywhere in the economy. The carbon is committed in a few weeks of concrete pours, and the harm unfolds over the following 80 years: distant in time. It falls disproportionately on other continents: distant in space. On strangers: distant in relation.
And it arrives not as an event but as a shift in probabilities, deaths that are real in aggregate and unattributable in every particular case: distant in likelihood. Distance discounts a cost, and building emissions are distant on all four axes at once. No one needs to deny them; inside any given decision they simply weigh nothing.
If the harm has been configured for distance, one response is to configure instruments for proximity. The human cost calculator, developed through our practice as a research instrument rather than an assessment tool, attempts to run the four distances in reverse. It is a small merger of the digital and the physical, a live model set beside the material act of building, and it performs a set of translations.
A building’s whole-life carbon becomes a number of expected human deaths, using the mortality cost of carbon: one statistical death per 4434 tonnes of CO2 equivalent (Bressler, 2021), which prices a conventional 5000 square metre Sydney office at about 4.7 lives.
For calibration, the average Australian’s lifetime emissions come to roughly 0.29 of one (Bressler, 2021; DCCEEW, 2025). The damage becomes dollars, and the dollars are placed where they will land: the richest tenth of humanity, having caused 48 per cent of emissions, bears 3 per cent of the losses, while the poorest half, having caused 12 per cent, bears about three quarters (Chancel, 2022; Chancel, Bothe and Voituriez, 2023).
Eighty years of consequence is returned to the moment of decision, and a probability becomes a count. A tonne is a unit that permits an equanimity that a number of people does not.
Placed beside the major rating schemes, the instrument also surfaced something it was not designed to find.
A commercial project can sit inside the Green Building Council of Australia’s low embodied carbon band, the RIBA 2030 Climate Challenge and France’s RE2020 simultaneously (GBCA, 2023; RIBA, 2021; Ministère de la Transition écologique, 2021), while exceeding a limit derived from the planetary boundary by a factor of roughly 200 (Reduction Roadmap, 2026).
The schemes measure improvement against a conventional building; the planetary boundary is indifferent to convention. Passing has been allowed to stand in for safe, and the difference between those two words is itself a discount, applied this time by the measurement system rather than the mind.
The calculator is an estimator and describes itself as one; Bressler’s published range is wide. None of that alters the shape of the finding. A factor of two does not rescue a project two hundred times over.
Treat affordability and carbon as one problem and the supposed trade-off between them largely dissolves. Smaller dwellings cost less to buy, less to run, and commit a fraction of the carbon; the 13 million existing bedrooms are the least expensive and least emitting supply that will ever be offered; retention, light structure and longer material lives cut cost and carbon together.
None of these trades one goal against the other. The direction beyond it is also known. The serious end of the field has moved past mitigation, and past adaptation, toward buildings that repair more than they consume: regeneration, in the field’s own words. What stands between here and there is not technical. It is a public taught to hear every environmental claim as a sales pitch, which is what makes the education matter, and it is framings like the one Miller describes, that make the goal immeasurably harder to reach.
Policy is presently running the other way: the National Construction Code’s next steps have been deferred in the name of housing cost, the two crises set against each other once again in regulation Building Ministers’ Meeting, 2025).
The reduction roadmap’s request of government is the opposite and worth repeating: a whole-life emissions limit in the Code, derived from the carbon budget rather than from a discount on current practice. The wider request falls on the professions that draw, price, appraise and permit, and it is to treat distance itself as the design problem. The accounts will balance either way. What remains open is whether the balancing is done deliberately, in codes and instruments, or by arrival, in premiums, losses and the price of living.
