Highlights • General road charges encourage shifts away from car to all other modes. • They result in sizeable additional government but face political opposition. • Effective measures to encourage carpooling come at a high cost to public funds. • Combined both policies yield important tax revenues while compensating carpoolers. • None of the proposed policies results in car occupancy rates exceeding 1.5.

Abstract This paper uses the Belgian national transport demand model for an analysis of measures to promote a higher occupancy rate for cars: (a) ‘carrot only’ policies that make carpooling more attractive (b) ‘stick only’ policies that make driving alone more expensive (c) a combination of both. An occupancy rate of 1.5 is obtained with a combination of a road charge of 4 EUR cent per km with a support measure for carpool that reduces the variable generalized costs of carpooling for commuting to work by almost 50%. Overall revenues from the road charge lie around 3 300 million EUR, while the monetary equivalent of the support to carpoolers lies around 1 300 million EUR. As the result of reduced car travel, revenues from fuel taxation decrease by around 700 million EUR. Combining road pricing with targeted support measures for carpooling can improve its public acceptance. However, the policies with the largest impacts on occupancy rates do not pass a cost-benefit test. Existing travel behavior suggests that carpooling has intrinsic drawbacks despite being one of the cheapest travel options, which explains why even measures with far-reaching budgetary implications fail to induce stated policy objectives in Belgium.