The UK has set itself the statutory goal of a 60% reduction in CO2 emissions by 2050 with “real progress” by 2020 (Defra, 2007). Demand side measures which improve energy efficiency make up three-quarters of the quantifiable measures featured in the UK Climate Change Programme and are expected to deliver significant CO2 emission cuts at negative costs for society (Defra, 2006a). Recognising that the construction industry has a key role to play in the delivery of demand side energy efficiency measures or low-carbon building design, several policy measures attempt to exert influence on the industry. However numerous barriers prevent the realisation of both the construction industry’s potential contribution and the government’s anticipated economic potentials. With the use of literature reviews and an industry questionnaire, the strengths and weaknesses of the current UK policy approach as they relate to the construction industry are identified. Policy measures which may be more capable of influencing the industry are then suggested. In contrast, the Kyoto Protocol mechanisms have largely failed to motivate the implementation of demand side measures. From an environmental perspective, measures which improve supply side efficiency and reduce the carbon intensity of electricity have real merit. However if the objective is long-term sustainable development then a response that neglects to value demand side measures could be interpreted as imbalanced. From this viewpoint, the paper also briefly considers a greater role for the building sectors in emerging economies and how international climate change policy could bring this about.