Saroop, you touched a complex and important issue related to Climate Change.
For sure, crops are important to feed animal and humans of our Planet. In addition, their presence may effect climate, air and soil conditions at different levels and by different mechanisms.
For example they act as sink of CO2 decreasing the concentration in air of this important GHG.
Furthermore they can decrease soil surface / ambient temperature and increase moisture, by evatranspiration process. In this sense the soil "respiration" and the related CO2 emission, may be effected.
Please refer to attached papers and links for further concepts .
As Valerio mentioned, this is a very touchy and timely question.
There are many ecosystem services from cover crops in crop rotations (e.g. reducing NO3 leaching, reducing soil erosion). However, their effect on GHG emissions (especially N2O emissions) is an on-going debate.
A recent meta-analysis (available at http://www.jswconline.org/content/69/6/471) of 26 peer-reviewed papers that included 106 observations of cover crop effects on N2O emissions has indicated, 40% of the observations had decreased N2O emissions due to cover crops, while 60% of the observations had increased N2O emissions. There were important interactions (such as legumes vs. non legumes and incorporated vs. not incorporated) indicating cover crop type and cover crop management has a critical impact on the GHG outcome. N2O emissions were higher in periods when cover crop decomposition but lower when the cover crops were alive, thus measurements over a complete year are needed for a meaningful assessment.
Most importantly, for a really meaningful assessment, it is necessary to evaluate net GHG emissions (CO2, CH4, and N2O), along with changes in soil C over several years, as inclusion of cover crops has potential to increase soil C sequestration over long-term. Such studies are almost not available in the published literature (to the best of my knowledge). Therefore we need to look at cover crops in a positive note, looking at their ‘well-known’, ‘time-tested’ ecosystem services.
In relation to what has been interestingly explained by Dr. Jayasunara I would like to add the need to obtain data of the entire C footprint of cover crops incorporation into cropping systems, that is, including the CO2-eq emitted as a result of cover crop's related management practices (e.g. sowing, termination, "soil preparation").
Related to the topic I would remind the recent meta-analysis about the effects of cover crops on SOC sequestration carried out by Poeplau and Don in AGEE (2015).
In addition to the effect of cover-crops increasing C stabilization mainly in no-till, we have observed lower emissions of N2O in comparison to industrialized fertilizers as urea. This is a very interesting topic on soil management of tropical and subtropical soils. Thank you very much by the citation the recent publications.