Life processes are fuelled by carbon compounds which are oxidized to CO2 (carbon dioxide), the latter is exhaled by all animals and plants. Conversely, CO2 is assimilated by plants during photosynthesis to build new carbon compounds. See also this comment about photosynthesis and global warming.
CO2 is produced by the burning of fossil fuels, which derive from the preserved products of ancient photosynthesis. The atmosphere exchanges CO2 continuously with the oceans. Regions or processes that predominantly produce CO2 are called sources of atmospheric CO2, while those that absorb CO2 are called sinks.
The following graph shows the annual carbon flows and storage in billion metric tons (Source: NOAA Earth System Research Laboratory, 2007)
Source and more details: http://www.esrl.noaa.gov/research/themes/carbon/