The aim of this study was to assess the cost and benefit of the implementation of a specific energy saving program in Hungary. We have considered the possible reduced damage to public health, building materials and agricultural crops that may be obtained from reducing emissions of important air pollutants and also how the program contributes to reduced emissions of greenhouse gases. The measures are described in the National Energy Efficiency Improvement and Energy Conservation Programs (NEEIECP), elaborated by the Hungarian Ministry of Industry and Trade and accepted by the Government in 1994. The energy saving expected from the program is approximately 64 PJ/year. The benefits were estimated using monitoring data and population/recipient data from urban and rural areas in Hungary together with exposure–response functions and valuation estimates mainly from western studies. Our analysis indicates that the main benefit from reducing the concentrations of pollutants relates to public health and that reduced prevalence of chronic respiratory diseases is an important effect. Reduced premature mortality is also important and the estimated attributable risk of air pollution to excess mortality at present is approximately 6%. The estimated annual benefit of improved health conditions alone is likely to exceed the investments needed to implement the program. In addition there are significant benefits due to reduced replacement and maintenance costs for building materials (30–35 million US$ annually in Budapest only). The damage to crops due to ozone is large, but a significant improvement in Hungary depends upon concerted actions in several countries.