In Austria, as in the majority of EU countries, greenhouse gas emissions are currently rising most strongly in the transport sector. In view of the Kyoto commitments and the EU's greenhouse-gas policy, the reduction of transport-related emissions therefore is a matter of great urgency. This article first identifies a dozen transport policy measures that Austria can implement on its own and that promise most significant emission reduction. We then evaluate these measures with regard to their employment effect and analyse their impact according to income groups. As our findings show, the economic instruments of car road pricing and a fuel tax increase potentially result in the strongest emission reductions; depending on the use of revenues thus generated, they can be associated with benign employment and distributional impacts. A wider use of bicycles as well as the increase of bimodal freight transport and the extension of truck road pricing to the entire road network follow next both in terms of emission reductions achievable by 2010 and with regard to their employment and distributional impacts. Increased rail investment and measures to foster regional public transport, as well as mobility management, are less effective measures to reduce emissions. However, rail investment has strong positive employment impacts, and public transport improvements are essential in the context of the effective pricing policies mentioned earlier.