Abstract: Guided by the goal of carbon peaking and carbon neutralization, urban traffic pollutants and CO2 emission reduction (hereinafter pollution control and carbon reduction) have become an urgent task. To this end, a system dynamic model with the consideration of the sunk cost effect and improvement of citizens’ awareness of green trips is built by introducing voluntary advocacy strategy. The principle of sunk cost effect is employed to clarify the inducing mechanism of new trips demand. Through dynamic simulation and comparative analysis of different scenarios, the synergetic strategy of pollution control and carbon reduction for small passenger cars is explored. Our results show the air pollution charging fee is a “double-edged sword” for pollution control and carbon reduction of small passenger cars. Moderate charging not only mitigates traffic congestion, but also reduces emission reduction. However, overcharging easily induces new demand for trips, causing some side effects. Compared with the baseline scenario, our proposed model decreases the PM pollution, CO2 emissions and greenhouse effect of small passenger cars by 33.98%, 21.72% and 30.69% respectively, demonstrating the model’s synergistic impacts on reducing pollution, carbon and inhibiting the growth of side effects.