Vegetation types & biomass

Dams usually flood land covered by some sort of vegetation. The vegetation cover varies in the amount of plant material, called biomass, present per hectare. Around half of plant biomass is made up of carbon atoms. When areas are flooded (or cleared in anticipation of flooding) the biomass is broken down and the carbon atoms join with oxygen to form carbon dioxide, the main greenhouse gas. Flooded vegetation also produces methane, a more potent greenhouse gas.

Larger reservoirs in areas of tropical forest release large amounts of greenhouse gases, while smaller reservoirs in areas of sparse vegetation release relatively small quantities of greenhouse gases. The net greenhouse effect of a new dam depends on whether its emissions per unit of energy generated are more or less than those from the other sources of energy that are likely to be used if the dam is not constructed.

Read a book titled "Tropical Deforestation and Climate Change" that more deeply explores the link between the destruction of biomass and greenhouse gas emissions.
Read an article about Amazonian deforestation.

Table source: http://cdiac.ornl.gov/epubs/ndp/global_carbon/tables.html#tables