In Australia, co-benefits have rarely entered policy discourse and have so far failed to gain traction in climate change-related policy debates. This is partly due to the dominant perception about the difficulties associated with identifying, quantifying and incorporating co-benefits into decision-making frameworks. There is also limited understanding on the part of policy-makers about the profound policy implications of a ‘co-benefits approach’ as a paradigm that can address multiple policy goals, including addressing climate change impacts, achieving sustainable development, and enhancing health, wellbeing and liveability. Our paper addresses this gap by contributing to current understandings of the ‘co-benefits approach’ as a means of integrating climate concerns into local planning and development control in general. At a more specific level, the paper provides an insight into the Australian local government policy context to illustrate how to plan, generate and purposively promote co-benefits in planning urban built environments. A desktop review of NSW councils’ web sites and their climate change-related policies was undertaken. A comprehensive online survey was subsequently conducted to investigate the extent to which councils have adopted a ‘co-benefits approach’ in their low carbon policies. Major barriers to integrating co-benefits in the policy process were identified in this research. They include: (i) local government's current practice of single-sectoral policy development; (ii) absence of an integrated and co-ordinated ‘whole-of-government approach’ to address climate change impact; (iii) over-reliance on quantitative decision-support frameworks; and (iv) over-emphasis on short-term and readily quantifiable monetary consideration of benefits. Local government's over-emphasis on readily quantifiable ‘monetary considerations’ in targeting benefits from climate change policies excludes a wide range of environmental, social and health benefits from incorporation in policy. This limits the achievement of optimal policy outcomes across multiple sectors using a co-benefits approach.