This chapter explores the potential of cocoa-based agroforestry systems (CBAFS) to contribute meaningfully to global climate change mitigation through carbon sequestration, while simultaneously offering smallholder farmers new economic opportunities via participation in carbon credit markets. As agriculture is both a driver and a victim of climate change, there is increasing interest in land use systems that combine productivity with ecosystem service provision. Cocoa agroforestry (characterized by the integration of cocoa trees with diverse shade species), represents such a system, capable of storing significant amounts of carbon in biomass and soils. The chapter examines the biophysical capacity of different cocoa agroforestry configurations to sequester carbon, noting that systems with higher tree diversity and structural complexity store more carbon than simplified or monoculture systems. These diversified systems can sequester between 60 and 120 tCO2e per hectare, depending on species composition, age, and management practices. This capacity positions them as viable candidates for participation in voluntary and compliance carbon markets. Despite this potential, the chapter outlines several challenges to farmer participation in carbon markets. These include limited awareness, high monitoring and verification costs, weak institutional frameworks, and uncertainties around land tenure and benefit-sharing. Additionally, the complexity of carbon accounting methodologies can deter smallholders from engaging in carbon trading initiatives. To address these barriers, the chapter recommends streamlining certification processes, enhancing farmer training, promoting aggregation through cooperatives, and integrating carbon financing into broader climate and agricultural development strategies. When well-designed and equitably implemented, carbon credit schemes can incentivize the expansion of cocoa agroforestry while advancing both environmental sustainability and rural development goals.