This debate is really simpler than it seems. Dollars are the units with which we can measure and compare everything in a home’s cost. The home uses more land? That equals more dollars in purchase price, property tax, storm runoff fees, etc. It uses more resources to build because it’s bigger? Well, it costs more. The only thing that can improve the accuracy of dollars is a carbon tax that is allocated and implemented perfectly. I realize that won’t be easy.
Recurring costs are a little more difficult. That’s why the EPA created a standard MPG rating for cars, and the Energy Guide rating for major appliances. With them, people could compare their future costs of operation of their purchase against the other competitive products.
I submit that the only worthwhile rating system for homes will be in dollars per year. An accurate HERS score can be converted to $/yr with a standard set of conditions.
Another significant metric for a house is the cost of transportation incurred by the residents. Walk scores and other ratings can be standardized and converted to $/yr, and reported on the MLS. This is already starting to happen.
Now, with a purchase price and a $/yr rating in hand, the consumer will be motivated to buy small, because it’s cheaper. If they can still afford a 3,000sq.ft. house, they should be able to buy it, there is no reason to put an artificial cap on size. Markets forces work well if the consumer is educated.
Unfortunately, LEED scores and Energy Star ratings are a confusing mess: http://greenbuildingindenver.blogspot.com/2010/10/leed-for-homes-rating-system.html