Wetlands are key carbon sinks; their spatiotemporal dynamics critically shape regional carbon balances. Using GWL_FCS30 data and an integrated PLUS-InVEST-RSEI-GWR framework, we tracked wetland changes across Xinjiang (2000-2020) and projected carbon stocks under three 2040 scenarios. The findings revealed the following: (1) Over the past two decades, Xinjiang's wetlands have contracted by 9.5 %, which is marked by widespread degradation offset by localized recovery. Permanent water bodies and floodplains shrank under agricultural expansion and water overuse, whereas marsh wetlands expanded 33.6 % through ecological replenishment and now act as the key buffer against carbon loss. A stark north-south divide emerged: southern wetlands declined 13.5 % (-2984 km2), driving regional loss, whereas northern wetlands increased 1.2 % (+81 km2) with a 25.5 % surge in the marsh area (+245 km2). (2) The carbon stock in wetlands decreased by 9 %. Southern Xinjiang contributed 93.8 % (1.82 x 106 t) of the total carbon loss across Xinjiang, with the degradation of flooded flats (SI = -20.20) and saline wetlands (-24.5 % area shrinkage) being the primary drivers, while northern Xinjiang achieved a net carbon gain primarily through the expansion of marsh wetlands (SI = 3.76). Here, flooded flats and saline wetlands contributed 18.6 % and 24.5 %, respectively, to carbon loss due to area reduction and decreased carbon density, whereas marsh wetlands increased carbon storage by 33.9 %. The sensitivity index (SI = 3.76) indicates that changes in the marsh wetland area exert a significantly positive effect on carbon sink enhancement. (3) Scenario modeling revealed that wetland conservation could increase carbon stocks by 17.3 % by 2040, surpassing both the natural recovery and economic development scenarios. Under the conservation scenario, northern Xinjiang gains 15.6 %-chiefly from marsh restoration-while southern Xinjiang gains 17.2 % through flood-plain protection. Conversely, economic development inflicts a carbon loss in the southern region that is 5.3 times that in the northern region. (4) Climate analysis showed that precipitation drives carbon sinks in semiarid southern Xinjiang, while temperature dominates in arid northern Xinjiang. In addition, evapotranspiration exerts weak, heterogeneous control. The findings offer a scientific blueprint for aligning wetland conservation with carbon neutrality in arid regions.