Abstract
This paper uses an applied general equilibrium model for Belgium to study the marginal efficiency effects of the revenue-neutral introduction of three transport instruments, when the government is using distortionary taxes for revenue-raising purposes. The three transport instruments are: peak road pricing; higher fuel taxes; and higher subsidies to public transport. The revenue-preserving instruments include lump sum transfers, a tax on labour income, and other transport instruments. The evaluation takes into account the impact of the policy reforms on three transport externalities: congestion; air pollution; and accidents. The feedback effect of congestion on the behaviour of economic agents is modelled explicitly. (A)