Understanding sequestration of carbon by coastal ecosystems is central to addressing the role they play in climate change mitigation. To quantify this process, accurate measurements of CO2 fluctuation, coupled with variations in residence time of coastal water-bodies are required. Nearshore ecosystems, including coastal lagoons, may provide an effective sink for atmospheric carbon dioxide, particularly those containing productive biota such as seagrass. However, the rate and pattern of carbon sequestration in seagrass meadows across a range of environmental settings is still poorly constrained. In this study, we utilize a robust physical tidal model, along with biogeochemical dissolved inorganic carbon (DIC) assessment, to estimate water residence time and net sequestration of atmospheric CO2 in an intertidal lagoon containing a seagrass (Zostera noltii) meadow. Total alkalinity and pH measurements taken from advected water mass exchanged with the open ocean at inlet boundaries are used to calculate DIC and pCO2. A predictive model of hydrodynamics provides good approximation of mean water residence time to within 6 h (±3 s.d). Results indicate that during the daytime study period the lagoon is a sink for carbon, having a mean net ecosystem productivity (NEP) of 3.0 ± 0.4 mmol C m−2 hr−1. An equivalent diel NEP range of between 15.23 and −9.24 mmol C m−2 d−1 is calculated based on reported shallow water pelagic respiration rates. Moreover, approximately 4% of DIC availability occurs from atmospheric CO2 transfer to lagoon water. However, a negative diel rate of −82 ± 81 mmol C m−2 d−1 is found, assuming overnight respiration ascertained from converted Zostera noltii O2 utilization. We hypothesize that analogous regional nearshore ecosystems provide baseline study sites suitable to elucidate the carbon capture potential of planned, nearby tidal range energy schemes.