Effect of Carbon Pricing on Housing Costs

Depending on the carbon price per tonne adopted, and its rate of increase, there will be some radical changes to the range of materials used in residential housing. High net carbon emitters such as asphalt (roads), clay bricks, steel roofing and timber flooring and framing, will be replace by concrete roads, concrete bricks, composite board roofing, flooring and framing.

House prices are dictated by affordability and supply/demand, not by “cost plus” factors. So, higher cost materials affected by the carbon tax will ultimately be replaced by materials not subjected to the tax.

There is a high demand for inflammable sheeting for walls and floors, and this technology will improve and become more competitive in price over block work and render. A high cost contributor to housing is roads, and asphaltic concrete (AC) will become user-competitive as the carbon tax increases, it being a derivative of coal.

Concrete roads will need to become more cost effective, with innovative construction methods such as polystyrene infill (known as “waffle” slabs) to compete more effectively with asphaltic concrete.