This paper aims to examine the justification for specific energy efficiency policies in economies with carbon pricing in place. The paper begins with an inventory of existing market failures that attempt to explain the limited uptake of energy efficiency. These market failures are investigated to see which can be overcome by carbon pricing in two subsectors – electricity use in residential appliances and heating energy use in buildings. This analysis finds that carbon pricing addresses energy efficiency market failures such as externalities and imperfect energy markets. However, several market and behavioural failures in the two subsectors are identified that appear not to be addressed by carbon pricing. These include: imperfect information; principal-agent problems; and behavioural failures.