This study outlines the development of an approach to evaluate the sources, sinks, and magnitudes of greenhouse gas emissions from a grazed semiarid rangeland dominated by mulga (Acacia aneura) and how these emissions may be altered by changes in management. This paper describes the modification of an existing pasture production model (GRASP) to include a gas emission component and a dynamic tree growth and population model. An exploratory study was completed to investigate the likely impact of changes in burning practices and stock management on emissions. This study indicates that there is a fundamental conflict between maintaining agricultural productivity and reducing greenhouse gas emissions on a given unit of land. Greater agricultural productivity is allied with the system being an emissions source while production declines and the system becomes a net emissions sink as mulga density increases. Effective management for sheep production results in the system acting as a net source (~ 60-200 kg CO2 equivalents/ha/year). The magnitude of the source depends on the management strategies used to maintain the productivity of the system and is largely determined by starting density and average density of the mulga over the simulation period. Prior to European settlement, it is believed that the mulga lands were burnt almost annually. Simulations indicate that such a management approach results in the system acting as a small net sink with an average net absorption of greenhouse gases of 14 kg CO2 equivalents/ha/year through minimal growth of mulga stands. In contrast, the suppression of fire and the introduction of grazing results in thickening of mulga stands and the system can act as a significant net sink absorbing an average of 1000 kg CO2 equivalents/ha/year. Although dense mulga will render the land largely useless for grazing, land in this region is relatively inexpensive and could possibly be developed as a cost-effective carbon offset for greenhouse gas emissions elsewhere. These results also provide support for the hypothesis that changes in land management, and particularly, suppression of fire is chiefly responsible for the observed increases in mulga density over the past century. © 2001 Elsevier Science Ltd.