We report results of initial space mission simulation studies for a laser-based, atmospheric CO2 sounder, which are based on real-time carbon cycle process modelling and data analysis. The mission concept corresponds to the Active Sensing of CO2 Emissions over Nights, Days and Seasons (ASCENDS) recommended by the US National Academy of Sciences’ Decadal Survey. As a pre-requisite for meaningful quantitative evaluation, we employ a CO2 model that has representative spatial and temporal gradients across a wide range of scales. In addition, a relatively complete description of the atmospheric and surface state is obtained from meteorological data assimilation and satellite measurements. We use radiative transfer calculations, an instrument model with representative errors and a simple retrieval approach to quantify errors in ‘measured’ CO2 distributions, which are a function of mission and instrument design specifications along with the atmospheric/surface state. Uncertainty estimates based on the current instrument design point indicate that a CO2 laser sounder can provide data consistent with ASCENDS requirements and will significantly enhance our ability to address carbon cycle science questions. Test of a dawn/dusk orbit deployment, however, shows that diurnal differences in CO2 column abundance, indicative of plant photosynthesis and respiration fluxes, will be difficult to detect.