The terrestrial biosphere is currently a strong sink for anthropogenic CO2 emissions. Through the radiative properties of CO2, the strength of this sink has a direct influence on the radiative budget of the global climate system. The accurate assessment of this sink and its evolution under a changing climate is, hence, paramount for any efficient management strategies of the terrestrial carbon sink to avoid dangerous climate change. Unfortunately, simulations of carbon and water fluxes with terrestrial biosphere models exhibit large uncertainties. A considerable fraction of this uncertainty reflects uncertainty in the parameter values of the process formulations within the models. This paper describes the systematic calibration of the process parameters of a terrestrial biosphere model against two observational data streams: remotely sensed FAPAR (fraction of absorbed photosynthetically active radiation) provided by the MERIS (ESA's Medium Resolution Imaging Spectrometer) sensor and in situ measurements of atmospheric CO2 provided by the GLOBALVIEW flask sampling network. We use the Carbon Cycle Data Assimilation System (CCDAS) to systematically calibrate some 70 parameters of the terrestrial BETHY (Biosphere Energy Transfer Hydrology) model. The simultaneous assimilation of all observations provides parameter estimates and uncertainty ranges that are consistent with the observational information. In a subsequent step these parameter uncertainties are propagated through the model to uncertainty ranges for predicted carbon fluxes. We demonstrate the consistent assimilation at global scale, where the global MERIS FAPAR product and atmospheric CO2 are used simultaneously. The assimilation improves the match to independent observations. We quantify how MERIS data improve the accuracy of the current and future (net and gross) carbon flux estimates (within and beyond the assimilation period). We further demonstrate the use of an interactive mission benefit analysis tool built around CCDAS to support the design of future space missions. We find that, for long-term averages, the benefit of FAPAR data is most pronounced for hydrological quantities, and moderate for quantities related to carbon fluxes from ecosystems. The benefit for hydrological quantities is highest for semi-arid tropical or sub-tropical regions. Length of mission or sensor resolution is of minor importance.