Ecological development of an area is impacted considerably by urban growth, which leads to climate change. Climate change is a major issue in the twenty-first century, and by absorbing CO2 from the atmosphere through photosynthesis, urban green space can be a major solution to climate change. We selected the Union Territory of Chandigarh for ecosystem service study, which has a population of more than 1.2 million. Management of carbon in green space is the best strategy for climate change mitigation and microclimate regulation within the city. This study aims to quantify carbon storage and sequestration in both physical and economic contexts. The InVEST model was used for carbon sequestration from 2013 to 2023. InVEST utilized the LUILC map and the carbon pool value and aggregated them. Remote sensing, along with the GIS tool, were used for the preparation of data input—remote sensing for land use and land cover of the study area, and GIS for the visualization of the investment output. The amount of green space was found to have decreased by 13% from the base year, and the amount of built-up areas increased approximately 21% at the expense of green cover. The results of the InVEST model show a decrease in carbon storage in this time period from 5.8 × 105 Mg in 2013 to 4.9 × 105 Mg in 2023. Total carbon sequestration in Chandigarh is −8.2 × 104 Mg, indicating greater carbon emission than sequestration. Chandigarh experienced a marked decrease in green cover and agricultural land during this time period. The built-up area in Chandigarh increased by 21% from 2013 to 2023. The total net present value from 2013 to 2023 was −11.48 million dollars, showing a loss due to increased carbon emissions and reduced carbon sequestration, rendering ecological projects economically unviable. Analysis of the study shows the need for improved green cover management of the study area and advocates for a more sustainable way aproach to addressing climate change.