Always happy to nitpick :P
In terms of minimizing exploits, perhaps the easiest approach is to pre-compute a carbon score for all blocks and items, and then focus on catching all the situations where those blocks/items can be destroyed. By default, assume 100% of the carbon goes back into the biosphere, and then write special-case logic for stuff like boats breaking into wood.
A few more what-ifs:
* If players toss wood-bits into the deep sea to disappear (as opposed to letting them disappear on land) should that count as sequestering it? Or would that almost be too easy?
* I forgot about trades -- if a villager provides/accepts wood, perhaps it is best to assume it was just freshly grown or is about to be burnt.
* Other dimensions. What should happen if players make a gate into a room in the Nether and do all their smelting there? Alas, we don't have that option in real life :P