In the last few decades, many forests have been cut down to make room for cultivation and to increase food or energy crops production in developing countries. In this study, carbon sequestration and wood production were evaluated on afforested farms by integrating the Gaussian diameter distribution model and exponential diameter-height model derived from sample plots of an afforested hardwood forest in Taiwan. The quantity of sequestrated carbon was determined based on aboveground biomass. Through pilot tests run on an age-volume model, an estimation bias was obtained and used to correct predicted volume estimates for a farm forest over a 20-year period. An estimated carbon sequestration of 11,254 t C was observed for a 189ha-hardwood forest which is equivalent to 41,264 t CO 2 . If this amount of carbon dioxide were exchanged on the Chicago Climate Exchange (CCX) market, the income earned would be 821 US$ ha -1 . Carbon sequestration from rice (Oryza sativa) or sugarcane (Saccharum officinarum) production is discharged as a result of straw decomposition in the soil which also improves soil quality. Sugarcane production does not contribute significantly to carbon sequestration, because almost all the cane fiber is used as fuel for sugar mills. As a result of changing the farming systems to hardwood forest in this study area, carbon sequestration and carbon storage have increased at the rate of 2.98 t C ha -1 year -1 . Net present value of afforestation for a 20-year period of carbon or wood management is estimated at around US$ 30,000 given an annual base interest rate of 3 %.