The study of Hu et al. (2001) highlights how this negative feedback process works.  Based on a five-year study of a grassland growing on a moderately-fertile soil at Stanford University's Jasper Ridge Biological Preserve in central California - which utilized twenty open-top chambers (ten each at 360 and 720 ppm CO2) - the authors found that a doubling of the air's CO2 content increased both soil microbial biomass and plant nitrogen uptake.  With less nitrogen thus left in the soil to be used by a larger number of microbes, microbial respiration per unit of soil microbe biomass significantly declined in the elevated CO2 environments; and with this decrease in microbial decomposition, there was an increase in carbon accumulation in the soil.

Hu et al. concluded that this CO2-induced chain of events could readily cause terrestrial grassland ecosystems to become significantly stronger net carbon (C) sinks than they are currently, especially if their plants became more efficient at acquiring nitrogen (N) from soils of low C:N organic matter ratio.  They also suggested that such CO2-enhanced grassland N acquisition might well be prompted by increased root colonization by symbiotic mycorrhizal fungi, which has been found to be a rather common consequence of atmospheric CO2 enrichment (Rillig et al., 1998, 2000).  Hence, the scientists validly concluded - as have many others (see the following paragraph) - that the carbon sequestered by these means "could partially offset the effects of anthropogenic CO2 emissions on atmospheric CO2 [concentration]."

In an analysis of experimental results reported in over 165 peer-reviewed scientific journal articles related to this subject, Campbell et al. (2000) determined that a doubling of the air's CO2 content stimulates grassland production by an average of 17% under normal conditions for such ecosystems.  They also reported that in times of unseasonable drought and hot weather, the stimulatory effect of the extra CO2 is even greater, and that the productivity of C4 species is about as responsive to atmospheric CO2 enrichment as is that of C3 species when water supply restricts growth, as often occurs in grasslands containing C4 species.

So how much extra carbon can be sequestered in the soils of the planet's grasslands as a result of a doubling of the air's CO2 content?  A good first stab at an answer is provided by the study of Williams et al. (2000), who studied this phenomenon for a period of eight full years in a Kansas (USA) tallgrass prairie, utilizing open-top chambers enclosing mixtures of C3 and C4 grasses that were continually fumigated with air of either ambient or twice-ambient atmospheric CO2 concentration.

One of the first things Williams et al. learned was that the average soil water content in the first 15 cm of the soil profile was approximately 15% greater beneath the chambers receiving the extra supply of CO2, due, presumably, to CO2-induced reductions in plant stomatal conductance that blunted transpirational water loss.  The saved moisture, in turn, enabled plants to be more productive during the growing season; and with a significant portion of that extra productivity directed belowground into roots, there was a nearly equivalent increase in soil microbial activity across the final five years of the study.  Last of all - at the end of the line, so to speak - there was an 8% increase in total soil carbon content.

How significant is this increase?  If extrapolated to all of earth's temperate grasslands, which make up about 10% of the land area of the globe, Williams et al. calculate that the CO2-induced increase in soil carbon sequestration would amount to an additional 1.3 Pg of carbon being sequestered in just the top 15 cm of the world's grassland soils over the next century.  Although small compared to what the planting of major new forests could sequester, this extra stored carbon is huge compared to what could be coaxed into the ground by any single government-sponsored or private-sector project.  In addition, it comes "free of charge" and above and beyond whatever carbon storage enhancements man might induce by changes in ecosystem management practices.  What is more, the ongoing rise in the air's CO2 content is predicted to lead to a dramatic invasion of grasslands by woody shrubs and trees (Knapp and Soule, 1998; Soule and Knapp, 1999), which will boost the carbon-sequestering prowess of these presently-treeless areas even more (Hibbard et al., 2001) ? and do it by completely natural means.

All in all, therefore, we can expect earth's current grasslands to become ever more productive and provide an ever-increasing brake upon the upward trend in the air's CO2 concentration in the coming years and decades.

References
Campbell, B.D., Stafford Smith, D.M., Ash, A.J., Fuhrer, J., Gifford, R.M., Hiernaux, P., Howden, S.M., Jones, M.B., Ludwig, J.A., Manderscheid, R., Morgan, J.A., Newton, P.C.D., Nosberger, J., Owensby, C.E., Soussana, J.F., Tuba, Z. and ZuoZhong, C.  2000.  A synthesis of recent global change research on pasture and rangeland production: reduced uncertainties and their management implications.  Agriculture, Ecosystems and Environment 82: 39-55.

Hibbard, K.A., Archer, S., Schimel, D.S. and Valentine, D.W.  2001.  Biogeochemical changes accompanying woody plant encroachment in a subtropical savanna.  Ecology 82: 1999-2011.

Hu, S., Chapin III, F.S., Firestone, M.K., Field, C.B. and Chiariello, N.R.  2001.  Nitrogen limitation of microbial decomposition in a grassland under elevated CO2.  Nature 409: 188-191.

Knapp, P.A. and Soule, P.T.  1998.  Recent Juniperus occidentalis (Western Juniper) expansion on a protected site in central Oregon.  Global Change Biology 4: 347-357.

Rillig, M.C., Hernandez, G.Y. and Newton, P.C.D.  2000.  Arbuscular mycorrhizae respond to elevated atmospheric CO2 after long-term exposure: evidence from a CO2 spring in New Zealand supports the resource balance model.  Ecology Letters 3: 475-478.

Rillig, M.C., Allen, M.F., Klironomos, J.N. and Field, C.B.  1998.  Arbuscular mycorrhizal percent root infection and infection intensity of Bromus hordeaceus grown in elevated atmospheric CO2.  Mycologia 90: 199-205.

Soule, P.T. and Knapp, P.A.  1999.  Western juniper expansion on adjacent disturbed and near-relict sites.  Journal of Range Management 52: 525-533.

Williams, M.A., Rice, C.W. and Owensby, C.E.  2000.  Carbon dynamics and microbial activity in tall grass prairie exposed to elevated CO2 for 8 years.  Plant and Soil 227: 127-137.