In this study, the supply of and demand for carbon storage and sequestration of woody biomass in the socio-ecological environment of the Wabe River catchment in Gurage Mountains, Ethiopia, were estimated. This information was subsequently integrated into a map that showed the balance between supply capacities and demand in a spatially explicit manner to inform planners and decision makers on methods used to manage local climate change. Field data for wood biomass and soil were collected, satellite images for land use and land cover (LULC) were classified, and secondary data from statistics and studies for estimation were obtained. Carbon storage, the rate of carbon sequestration and the rate of greenhouse gas (GHG) emissions from diverse sources at different LULCs, was estimated accordingly by several methods. Even though a large amount of carbon was stored in the catchment, the current yearly sequestration was less than the CO-eq. GHG emissions. Forest and Enset-based agroforestry emissions exhibited the highest amount of woody biomass, and cereal crop and wetland exhibited the highest decrease in soil carbon sequestration. CO-eq. GHG emissions are mainly caused by livestock, nitrogenous fertilizer consumption, and urban activities. The net negative emissions were estimated for the LULC classes of cereal crop, grazing land, and urban areas. In conclusion, without any high-emission industries, GHG emissions can be greater than the regulatory capacity of ecosystems in the socio-ecological environment. This quantification approach can provide information to policy and decision makers to enable them to tackle climate change at the root level. Thus, measures to decrease emission levels and enhance the sequestration capacity are crucial to mitigate the globally delivered service in a specific area. Further studies on the effects of land use alternatives on net emissions are recommended to obtain in-depth knowledge on sustainable land use planning.