Many cities across the world have the aspiration to be carbon neutral. However, this requires energy efficient buildings and the implementation of green infrastructure. A major challenge in this regard is that carbon dioxide emissions may be regarded as being embodied within our construction materials. Embodied energy is the quantity of energy required to process and supply these materials to an urban development and embodied carbon can be measured as the total weight of carbon dioxide used in the extraction, manufacture and delivery of the materials. Determining the amount of carbon dioxide capture required to offset the embodied carbon in urban developments is a complex task. This paper describes the findings of an Australian Research Council funded project that has examined the use of street trees to create carbon neutral developments in Australia. An accounting methodology is presented that calculates the embodied carbon over the material supply chain using a cradle to gate approach. This methodology is applied to a typical residential development where a permeable paving system is used for stormwater control. It was found that the embodied carbon in a 370 mm deep permeable pavement system is approximately 5.9 t / 100 m2 of pavement. Trees typically take 6 to 10 y to transform from their juvenile planting state to full maturity and they uptake different quantities of carbon dioxide throughout this transformation. This leads to an initial carbon deficit, but this is readily restored over the typical 50-year life of a tree, during which time there is a quantifiable net-positive contribution to carbon capture. It was found that four street trees planted per 100 m2 of permeable paving is sufficient to create carbon neutral permeable pavement systems. This paper demonstrates that street trees can be used in combination with permeable pavements to create carbon neutral developments. This is relatively new concept and the contribution of this paper is to demonstrate how to control the potentially problematic issue of tree roots damaging pavements.