What I said was remove the demand for big homes and there would be less demand for the natural resources and the materials made from them. If we quit building 3000sf homes and reduced them to 2000 sf avg. We would need and consume 1000 sf less material. Supply would have to go down or the suppliers would go broke.

"The supply of materials (and their corresponding price) will have no effect on the demand for big homes."

Sure it would. This is a real life example. If a 2800 sf home cost $200 per sf to build today and that cost went up to $250 per sf that adds $140 K of cost. This is simply the difference in using certified green materials in the build vs. standard practice materials. Try convincing a developer to make that move for the good of the world.