This research investigated the distribution of the global climate planetary boundary (PB) on a national scale. Then it was distributed to a sector-specific carrying capacity by the principles of acquired rights (grandfathering) and sufficientarianism. Then, four wood dwellings were compared against these carrying capacities using the life cycle assessment methodology. The climate safe operating space for new dwellings is about three times larger when using the principle of sufficiency compared to acquired rights. The rationale for the sufficiency perspective is that it considers the fundamentals of a society leading to a fulfilling life. The concept disregards the current surplus elements in society, which gives more space for emissions for the remaining elements in a fulfilling society. The acquired rights reflect the current society as optimal but require systemic changes in the different sectors to reduce their total impacts to remain within climate PB while keeping the sector’s current share of impacts. However, building with wood cannot alone contribute to society staying within the climate target. The end of life contributes most to the impact due to biogenic carbon release, and energy consumption follows next. Reduction of the average yearly built area shows considerable potential to close the target gap. In addition, improving and implementing circularity, carbon capture, and material efficiency would reduce biogenic carbon’s end of life impacts. Combined with energy-positive buildings and low-carbon materials, this could be a viable mitigation pathway to explore further.