A dairy farm greenhouse gas (GHG) model was applied in this study to compare the Intergovernmental Panel on Climate Change (IPCC) method and the life cycle assessment (LCA) procedure, which are the principal methods for quantifying the carbon footprint of dairy production. The objectives of this paper were to compare the auditing methods in estimating the carbon footprint of grass and confinement dairy systems and to assess the methods in estimating the footprint of grass-based dairy farms varying in cow genetic potential, stocking rate and level of concentrate feeding. The input data used to operate the model was based on published research studies. The results of the study showed that the IPCC and LCA methods ranked the carbon footprint of dairy systems differently. For example, the IPCC method found that the carbon footprint of the confinement dairy system was 8% lower than the grass system, but the LCA results show that the confinement system increased the carbon footprint by 16%. The comparison of grass-based dairy systems, differing in cow genotype, stocking rate and concentrate fed per cow also showed that the methods did not agree on the ranking of dairy systems carbon footprint. The re-ranking of dairy systems carbon footprint occurred because the IPCC method excludes emissions associated with imported goods, for example, concentrate. Thus, it is incorrect to consider only components of the dairy system relevant for policy reporting such as that used by IPCC when estimating the carbon footprint of dairy produce. Instead, holistic approaches, such as LCA, which consider on and off-farm GHG emissions should be used. Therefore, reform of the present policy framework is required to enable quantification of the impact of mitigation strategies on global emissions. The evaluation of the carbon footprint from grass-based systems differing in cow genotype also demonstrated that selecting cows solely for milk production will increase the carbon footprint of grass-based dairy systems relative to cows selected on a combination of traits, because of reduced cow fertility and thus higher emissions from replacement heifers.