The paper analyses trends in energy use and carbon dioxide emissions in the Swedish building sector between 1970 and 2000 with focus on the development of energy efficiency in the average stock of buildings and in the new construction. The energy efficiency improved throughout the seventies and early eighties, and studies revealed major potentials for further improvements. However, the energy efficiency has levelled off with almost no improvement during the nineties. The statistics for new-constructed multi-dwelling buildings indicate increasing energy use per floor area since 1995, and even more amazing: the new-constructed multi-dwelling buildings are at the same level of energy efficiency as the average existing building. Parallel to this development, the best available technology represented by low-energy buildings, uses less than a third of the energy used in average new buildings. Much of this development may be explained by changes in energy prices. The increasing oil price between 1972 and 1985 correlates well with the improvements in energy efficiency, even though the effect was limited by the low electricity price following the nuclear power programme. However, promotion of energy efficiency is complicated by the ineffective distribution of costs and benefits between actors, especially in the new construction. Moreover, to the residents energy cost is a small part of the expenditures and energy efficiency is merely one of many qualities valued in a building. An important factor behind the increasing energy use in new-constructed multi-dwelling buildings may also be new exceptions in the energy standards which were introduced to promote district heating. Finally, the paper gives some policy recommendations to improve the energy efficiency in the Swedish building sector: Not to support supply substitution at the expense of energy efficiency; Regulations for individual measurements and debiting of space and water heating; Strengthening of the energy standards to promote technical efficiency in the new construction. (C) 2003 Elsevier Ltd. All rights reserved.