In Australia, the transportation sector is the third largest contributor of CO2-e emissions. In order for Australia to meet the ratified target of 5% below 2000 emissions levels by 2020, a number of changes must be put in place. Sustainable transport design allows for more carbon-friendly travelling alternatives in urban and suburban areas where transportation activities mostly occur. In order for the design to be successfully accepted by the community, a good understanding of people's travel behaviour and preferences of transportation mode is required. This paper offers a review of current transportation research in the context of Australia that spans a number of disciplines including economics, engineering and psychology. The objectives are to assess the key factors that have been empirically shown to affect individual transportation mode choice, identify the shortcoming and gaps in the literature, and recommend how this research can be used to aid in future carbon reduction through better understanding of people's travelling behaviour.