Does Carpooling Reduce Carbon Emissions? The Effect of Environmental Policies in France

Road transportation is among the most carbon-intensive sectors in the economy, underscoring the urgent need for strategies to meet climate objectives. Carpooling has emerged as a promising solution for carbon mitigation. However, by making car travel more attractive, carpooling may lead to ambiguous environmental outcomes. This study evaluates carpooling's potential to mitigate carbon emissions and explores various strategies to enhance its environmental benefits. A key focus of this research is the vehicle occupancy rate, which we define as a robust metric for assessing carpooling's carbon mitigation potential. This metric is reliable as it accounts for travelers' preferences for alternative transport modes. We also analyze how policies that impact monetary trip costs influence carpooling adoption. Using a unique database from France's leading carpooling platform, we show that increasing monetary trip costs through carbon pricing boosts both carpooling demand and supply, while improving occupancy rates. Furthermore, we find that novice users are particularly sensitive to fluctuations in monetary trip costs. In addition to this policy, we explore the effect of encouraging drivers to transition into passengers. Our results suggest that this strategy holds significant potential for further reducing carbon emissions. The insights from this study are crucial for policymakers seeking to design more effective strategies for reducing vehicle emissions and achieving climate targets.