Nowadays the transport sector is one of the most challenging sectors in terms of reducing pollution produced in this sector. It becomes more and more clear that one of the best solutions for mitigating this pollution and the climate change linked to it is the usage of electrified railway. The aim of this article is to evaluate the impact that electrification of the railway will have on the environment from the perspective of pollution. The article shows a system dynamics model, which is based upon factors that affect a newly electrified railway. These include power demand, economics and the environmental impact originating from the railway. This model can be applicable for any country, however in this article Latvia is modelled as an example of how the model works and how the environmental factors will change as a result of an electrification of Latvia' s railway system.