Prior to the resumed climate negotiations in Bonn in July this year, it was thought that an agreement on the unresolved crunch issues of the Kyoto Protocol was unrealistic. This was primarily due to the US withdrawal from the Kyoto Protocol, and the failure of the previous climate negotiations that stranded mainly because of disagreement on the inclusion of land use, land-use change, and forestry (LULUCF) activities. The LULUCF issue is controversial in the climate negotiations, but an agreement has now been reached. This paper explores the possible contribution of LULUCF activities in promoting greenhouse gas emissions reductions. A survey on the literature of the potential and cost of LULUCF activities is therefore central. Analysis of the recent climate negotiations is also important. It is clear that the potential for carbon sequestration is large, but there are large variations in the estimates as factors such as land availability and the rate of carbon uptake complicate the calculations. There are also variations in the costs estimates, and economic analysis of LULUCF projects are not easily compared as no standard method of analysis has emerged and come into wide use. Despite the difficulties in comparing the costs of carbon sequestration, it is clear that it is a relatively inexpensive measure. Even though the potential for carbon sequestration is large, its role in reducing emissions of greenhouse gases (GHG) is limited by the Kyoto Protocol. The recent climate negotiations in Bonn and Marrakesh have specified the modalities, rules and guidelines relating to LULUCF activities. One of the main outcomes is that Japan, Canada and Russia are allowed large inclusions of sinks in their GHG emission accounts.