Agricultural tillage practices are important human-induced activities that can alter carbon emissions from agricultural soils and have the potential to significantly contribute to reductions in greenhouse gas emission (Lal et al, 1998). This research investigates the expected costs of sequestering carbon in agricultural soils under different subsidy and market-based policies. Using the detailed National Resources Inventory data, we estimate the probability that farmers adopt conservation tillage practices based on a variety of exogenous characteristics and profit from conventional practices. These estimates are used with physical models of carbon sequestration to estimate the subsidy costs of achieving increased carbon sequestration with alternative subsidy schemes.