This paper offers a survey of the economic literature on the policy challenges and options available to improve energy efficiency. We emphasize energy efficiency in buildings since it has the largest potential impact in terms of emission of reduction on the demand side and since this impact is too often underestimated. The paper then dis- cusses the relevance of the lessons learned from the survey for Belgium. The resulting picture is not pretty. The Belgian energy efficiency gap is shown to be one of the widest among European countries, and particularly so for buildings. Flanders is ahead of the curve in cashing in on the potential benefits of improved energy efficiency in buildings. But the scope for action is still very large across communities in the country.