This study investigates the changes in land use/land cover (LULC) and their impact on carbon sequestration and greenhouse gas dynamics in the Gandak River Basin (GRB) in India, focusing on the period between 2014 and 2024. LULC changes significantly influence ecosystem functions, including carbon storage and air quality. Using machine learning (ML)-based LULC classification, the study identified notable shifts in land cover types. In 2014, the basin was predominantly covered by agricultural land, followed by forest, water bodies, and urban areas. By 2024, urbanization increased notably, with a corresponding decline in agricultural and forested areas. Using the InVEST model, carbon storage estimates revealed a net increase of 23,415,542.10 Mg of carbon (C) over the ten years, largely due to improved agricultural practices and carbon sequestration efforts. However, the increase in urbanization has led to higher emissions of greenhouse gases such as formaldehyde (HCHO), carbon monoxide (CO), nitrogen dioxide (NO₂), and carbon dioxide (CO₂), contributing to poor air quality and exacerbating the greenhouse effect. Elevated concentrations of these gases were linked to reductions in forest cover, soil degradation, and intensified human activities, highlighting the dual challenge of balancing carbon sequestration with air quality management. This study underscores the importance of sustainable LULC planning to mitigate emissions, enhance carbon storage, and reduce the basin’s vulnerability to climate change. These findings provide critical insights for policymakers to design strategies that promote eco-friendly development while addressing the environmental and climatic challenges posed by LULC transformations.