Why the built environment may be our most powerful climate lever

Buildings may be our most powerful climate lever – but only if we stop thinking of them as just buildings.

Buildings are often treated as the endpoint of climate policy – the place where energy and materials are consumed and where people shelter from heatwaves, floods and storms.

But how we build now will determine energy demand, drive industrial production and shape ecological outcomes for decades.

Seen this way, the built environment is not simply a sector adapting to climate change. It is a system that will determine whether many other sectors decarbonise.

A lever far larger than buildings

Carlos Flores, Director of the NSW Net Zero Plan 2035 Taskforce, moderated a powerful AdaptNSW Forum 2025 session on How we build now: Carbon, community, and the future of the built environment.

Carlos, a former director of the National Australian Built Environment Rating System (NABERS), began by reframing the role of buildings in climate mitigation and adaptation.

The Australian Government’s Built Environment Sector Plan shows that emissions from buildings extend far beyond what occurs inside them.

Direct emissions – primarily from gas used for heating, cooking and hot water, refrigerant leaks from air-conditioning and refrigeration systems – account for about 5% of Australia’s national emissions.

But those Scope 1 emissions are only the first layer.

Buildings have far greater influence through the energy system, consuming around half of emissions from electricity generation, or Scope 2.

“In New South Wales, about 54% of electricity is used in buildings – residential and non-residential. So that is more electricity than all the other sectors of the economy combined,” Carlos said. That share will “increase dramatically” as Australia electrifies buildings and transport. 

A third layer, Scope 3 emissions, sits further upstream.

We tend to think of the “industrial sector” as separate from the built environment, Carlos observed. But in Australia, most heavy industry supplies construction.

“There aren’t a lot of industrial emissions sessions in conferences like this,” Carlos said. “But the truth is that we’re not making cars [in Australia]. We're not producing computers. Most of our industrial sector is making cement and aluminium and glass and bricks. It's mostly construction materials. Most of them we use domestically.”

Infrastructure Australia estimates that buildings and infrastructure are directly responsible for around a third of Australia’s emissions, but when supply chains are included, the sector influences more than half.

Industrial investment follows demand signals. Steelmakers will only build green furnaces if there is a demand for green steel. Cement producers will only scale low-carbon alternatives when developers specify them.

“The built environment can be a really big catalyser of emissions beyond its footprint,” Carlos said.

“If you count the number of hours you spend this week inside of buildings, it's probably at least 80%... [This] can be depressing. But it also reinforces just the importance of the built environment and the ability to be a massive catalyser.”

Carlos Flores, Director, NSW Net Zero Plan 2035 Taskforce

The invisible systems shaping outcomes

If the built environment has so much influence, why does progress often feel slow?

Andrew McKenzie, an architecture writer, editor, publisher, Founding Director of CityLab and host of the Climate360 podcast, suggested part of the answer lies in how the sector is “disaggregated and uncoordinated”.

Construction is treated as a sequence of separate decisions – planning approvals, design, finance, procurement and delivery – when really these decisions are deeply interconnected.

“Largely, how we build hasn’t changed in the last century, and we are overwhelmingly geared to market interests rather than public interests,” Andrew said.

He described the forces shaping our buildings as “dark matter”: planning rules, insurance frameworks and banking systems and “all that grey stuff that rules our lives”.

Our opportunity is to recognise the built environment not as one system among many, but as the system that connects many.

Elizabeth Mossop, Professor of Urban Resilience, Faculty of Business at University of Technology Sydney, added another dimension to the discussion of interconnected systems.

Elizabeth is Academic Director of Living Lab Northern Rivers, which was established after the 2022 floods to bring research and community together.

“Questions about resilience are so fundamental, and I believe that they are inextricably linked to questions of social justice,” she said. 

“Whatever the nature of the disaster, it disproportionately impacts the people who are most vulnerable in our society. If you want to achieve resilience, you need to get out there and fix poverty.”

The built environment sits at the centre of this challenge. Housing, infrastructure and planning decisions determine who has shelter from the storm. But resilience is not simply a matter of stronger buildings. It is also how the systems that shape our cities create equal opportunity.

From machine logic to ecological systems

Julia Watson brought a broader philosophical lens to the discussion.

Much of modern urban development was shaped by an idea of progress that placed humans outside nature. “I call it the mythology of technology,” Julia said. “It powered the age of industrialisation... but it also ignored millennia of old wisdom and local innovation.”

Out of this worldview emerged a new ideal of progress that “wasn’t measured by harmony with the living world.. [but] by our ability to remake it in the image of the machine”.

This philosophy took spatial form. At the dawn of modernism, Louis Sullivan’s famous maxim form follows function helped inspire cities designed to “mirror the efficiency of machines”.

“Cities were reimagined as engines of innovation powered by coal and steel and pure industrial ambition. Skyscrapers soared, streets were paved and urban expansion raced forward on the assumption that efficiency itself was the measure of progress.”

Julia Watson, Co-Founder, Lo-TEK Institute

Climate change now exposes the limits of this thinking.

“Cities became rigid, extractive and mechanical. They exhausted ecosystems, displaced culture and buried rivers and wetlands. So what modernism gained in order and efficiency it actually lost in life.”

Julia proposed a different design philosophy: form follows flux.

“The forms we design must respond to a constant state of change – to continuous flow and transformation – rather than a fixed condition.” She pointed to examples such as living root bridges grown over generations, fish trap systems that respond to floods and sponge cities designed to absorb water. These systems evolve with climate, culture and ecology rather than attempting to dominate them.

Rethinking the role of the built environment

Taken together, the panel’s insights point to a shift in how Australians understand the role of the built environment.

Changing “how we build now” for a future climate is essential. But if the built environment is a mediator between human and ecological systems, we must take responsibility for the role it plays in the systems that determine what we build in the first place.