Global warming and climate change are important environmental issues affecting human lives and systems of planet earth. There is a need to reduce the GHG intensity without compromising the productivity in order to achieve low carbon development. A whole landscape approach to reduce emissions and increase carbon stocks can help to achieve reasonable quantity of emission reductions by aggregating smallholders’ carbon assets and makes possible to take up multiple mitigation activities by involving the same communities. A study was conducted quantify the extent of emission reductions and carbon sequestration in a contiguous area of 5000 ha (a grid) involving about 2000 households in three villages in southern India. The extent of emission reductions and the potential involved in sequestering carbon by agroforestry was studied. The activities considered were as per the guidelines for the preparation for the national GHG inventories. The extent of GHG emissions are 18114 t CO₂/ year. The maximum contribution to emissions is from the use of fuelwood for cooking and heating, followed by livestock and paddy cultivation. Low cost alternatives such as efficient lighting and energy efficient stoves can minimise the emissions to the extent of 30%. Integrating high values trees such as teak (Tectona grandis) on the farm boundaries at a distance of 1.2 m can alone reduce the emissions to the extent 60% if taken up in the entire rainfed area of the grid. Linking such agroforestry activities with that of the developmental programs operational in India can fetch substantial returns (up to Rs. 20 million) to the communities excluding the benefits from trees. Activities such as agroforestry (integration of trees in landscapes), introduction energy efficient systems though individually are compatible with that of the Clean Development Mechanism (CDM) but an umbrella methodology integrating these interventions at a landscape level is lacking. Such an approach will not only help to realize the benefits from trees but also makes possible returns from carbon finance mechanisms by integrating small holders in future.