Because of its specific landscape and its vulnerable ecosystem, the Swiss Alpine region suffers a lot from transport-related pollution which is much higher per transport unit than in the rest of Switzerland. The introduction of a regionally differentiated transport pricing would reduce negative impacts of transportation in the Alps. Applying SwissTRANS, a multi-sectoral general equilibrium model of Switzerland introducing both the Alpine region and the rest of Switzerland, our results suggest that a change from the current pricing regime in transport towards a marginal social cost pricing scheme is beneficial for both the Alpine region and the rest of Switzerland. However, concerns about regional environmental efficiency provide little justification in terms of aggregate welfare for tax differentiation across Switzerland. Nevertheless tax differentiation does matter at the regional level suggesting that regional policies in terms of compensation policy instruments play a critical role.