Traditionally, road transport has been the dominant mode of transportation in Bangladesh, causing not only a burden on the economy through the import of gasoline, but also aggravating the environment through increased emission of greenhouse gasses. Road based energy-intensive transport system in Bangladesh has mainly evolved in absence of vision for long-term transport policy. Emission of green house gases (e.g. mainly CO,, N20 and CH4) resulting from transport fuel have been estimated in this study. Future transport performance has been projected using a cointegrating econometric model. The model predicts that passenger traffic in Bangladesh is likely to grow at more than 7% per year and freight traffic at more than 17 percent per year during the period 2008-2025. This will cause proportionate increase in energy consumption and CO, emissions. The effects of various policy options aimed at reducing energy consumption and CO2 emission have also been analysed using a scenario approach. The results show that combining modal shift, promoting energy efficiency, switching to CNG and using low emission vehicle can potentially reduce about 40 percent emission from the land transport of Bangladesh.