Pasture can be either a source or a sink for atmospheric carbon dioxide, depending primarily on climate and land management. In the absence of specific data on pasture in the northeastern United States, the parameterization of ecosystem models for carbon and energy flux has been based on data from grasslands in the Great Plains (United States), where climate is more arid and less management intensive than in the eastern United States. Models have not been adequately parameterized to simulate carbon dynamics under managed dairy grasslands in the humid eastern United States. This paper aims to provide TEM‐Hydro2—a terrestrial ecosystems model—with region‐specific dairy pasture parameterization in Pennsylvania to more realistically determine humid grassland dynamics under a changing climate. Through this study, we highlight the importance of considering region‐specific calibration data in reporting realistic ecosystem response to climate change through the comparison to a simulation based on a xeric parameterization. Our field observations indicate that Pennsylvania’s more humid climate results in higher carbon and nitrogen flux exchanges between grassland and the atmosphere, but the soil carbon pool is significantly lower compared with the semiarid grassland. Moreover, Pennsylvania pasture is simulated to be more sensitive to climate change based on the region‐specific parameterization. Projected to the end of the 21st century, dairy pasture in Pennsylvania will probably experience increased carbon uptake and soil carbon accumulation under continuous grazing management, while hay production would drastically reduce Pennsylvania dairy pasture’s capacity to sequester carbon.

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