Trade-offs and counteractions: carbon sink-source dynamics and carbon market potential in paddy fields under long-term elevated CO2 and warming

• Elevated CO 2 raises topsoil carbon, but warming causes major subsoil carbon loss. • Combined CO 2 and warming synergistically boost methane emissions by 77.4%. • Carbon market gains under eCO 2 are vulnerable without methane-inclusive accounting. Rice paddies, which are crucial to global food security but also significant sources of agricultural greenhouse gas emissions, are facing unprecedented pressure under climate change. Quantifying their carbon sink-source dynamics under interactive elevated CO 2 (eCO 2 ) and warming is essential for climate-resilient management. Using a 12-year free-air CO 2 enrichment plus infrared warming (T-FACE) experiment in paddy field, we quantified interactive effects on C balance. Elevated CO 2 (600 ppm) alone increased aboveground and belowground biomass by 20.1% and 42.2%, enhancing topsoil (0–20 cm) organic carbon (SOC) storage (+12.64 Mg C hm −2 ) but raising methane (CH 4 ) emissions by 56.0%. Warming (+2°C) alone reduced subsoil SOC (20–100 cm; −14.80 Mg C hm −2 ), decreased belowground biomass (−5.2%), and increased CH 4 emissions by 47.3%, converting paddies to net C sources (−73.43 kg C hm −2 ). Combined eCO 2 and warming synergistically amplified CH 4 emissions (+77.4%), offsetting modest C sequestration gains (+94.09 kg C hm −2 ) despite intermediate plant productivity. Vertical SOC distribution revealed divergent responses: eCO 2 -driven gains concentrated in topsoil, while warming-induced losses dominated subsoil layers (>20 cm depth). Net ecosystem carbon budgets (NECB) showed eCO 2 enhanced sequestration (+254.85 kg C hm −2 ), whereas warming caused net C loss (−73.43 kg C hm −2 ). Economic analysis projected carbon market revenues of ¥1.5 billion (2060 price) under eCO 2 but penalties of −¥420 million under warming for China’s paddy area (3 × 10 7 hm 2 ). Critically, current carbon markets overlook CH 4 -driven global warming potential (GWP) increases (+28.9–39.1%), inflating apparent benefits of eCO 2 . We conclude that unmanaged paddies under future climates risk becoming net GHG sources due to warming-induced subsoil C loss and synergistic CH 4 emissions. Strategic interventions—water management (e.g., mid-season drainage), stabilized organic amendments, and deep-rooted cultivars—are essential to leverage eCO 2 -driven C sequestration while mitigating CH 4 . Policy frameworks must integrate GWP-adjusted accounting to avoid incentivizing high-methane C sinks.