Carbon moves from the atmosphere to the biosphere and also from the atmosphere to the hydrosphere through a variety of processes.
<h3>Carbon cycle</h3>
Carbon in the form of carbon dioxide in the atmosphere is sequestrated by plants (biosphere) through a process known as photosynthesis.
When plants die, their organic matter decomposes into the soil (lithosphere) while some carbon is released back into the atmosphere via decomposition. Soil carbon also helps plants to grow.
Carbon in the atmosphere also gets sequestrated into water bodies (hydrosphere) by dissolution.
The good thing about a dam is that electricity can be created by mechanical means. That does not affect the atmosphere. Storing such production is a different matter.
The bad thing about a dam is that it wreaks havoc on the land where the water is stored behind the dam.