The ability to accurately observe the Earth's carbon cycles from space gives scientists an important tool to analyze climate change. Current space-borne Integrated-Path Differential Absorption (IPDA) lidar concepts have the potential to meet this need. They are mainly based on the pulsed time-of-flight principle, in which two high energy pulses of different wavelengths interrogate the atmosphere for its transmission properties and are backscattered by the ground. In this paper, feasibility study results of a Pseudo-Random Single Photon Counting (PRSPC) IPDA lidar are reported. The proposed approach replaces the high energy pulsed source (e.g. a solid-state laser), with a semiconductor laser in CW operation with a similar average power of a few Watts, benefiting from better efficiency and reliability. The auto-correlation property of Pseudo-Random Binary Sequence (PRBS) and temporal shifting of the codes can be utilized to transmit both wavelengths simultaneously, avoiding the beam misalignment problem experienced by pulsed techniques. The envelope signal to noise ratio has been analyzed, and various system parameters have been selected. By restricting the telescopes field-of-view, the dominant noise source of ambient light can be suppressed, and in addition with a low noise single photon counting detector, a retrieval precision of 1.5 ppm over 50 km along-track averaging could be attained. We also describe preliminary experimental results involving a negative feedback Indium Gallium Arsenide (InGaAs) single photon avalanche photodiode and a low power Distributed Feedback laser diode modulated with PRBS driven acoustic optical modulator. The results demonstrate that higher detector saturation count rates will be needed for use in future spacebourne missions but measurement linearity and precision should meet the stringent requirements set out by future Earth-observing missions.