Chemical reactions in white dwarf and carbon allotropes White dwarfs consists mostly of carbon and oxygen. In my opinion, they are too hot to contain these elements in molecular form and hence chemical reactions does not happen (I think resulting CO2 will also decompose under such high temperature and pressure). I have two questions related to that:

1) After a few billion years, can the WD cool down enough to sustain chemical reactions which will result in production of CO2.

2) Given, there is very high pressure and temperature, after a few billion years what will be the dominant allotrope of carbon (Do we have, in future, diamonds in the sky ;)

I strongly doubt given the extreme density of white dwarfs( I think density of white dwarfs wont change over time), if any of the scenario is possible.
White dwarfs are objects the size of the Earth, but with a mass more similar to the Sun. Typical internal densities are $10^{9}$ to $10^{11}$ kg/m$^{3}$.

White dwarfs are born as the contracting core of asymptotic giant branch stars that do not quite get hot enough to initiate carbon fusion. They have initial central temperatures of $\sim 10^{8}$K, that swiftly (millions of years) drops to a few $10^{7}$K due to neutrino emission.

An important point to make is that after that, the interior of a white dwarf is almost isothermal. This is because the degenerate electrons that provide the pressure support also have extremely long mean free paths for scattering interactions and thus the thermal conductivity is extremely high.

The exterior of the white dwarf is a factor of 100 cooler than the interior. The temperature drop happens over a very thin shell (perhaps 1% of the outer part of the white dwarf), where the degenerate gas transitions to becoming non-degenerate at the surface.

This outer layer acts like an insulating blanket and makes the cooling timescales of white dwarfs very long. From interior temperatures of say $3\times 10^{7}$ K it takes a billion years or so to cool to $5\times 10^{6}$ K and then another 10 billion years to cool to around $10^{6}$K, and such white dwarfs, which must have arisen from the first stars that were born with progenitor masses of 5 to 8 solar masses, will be the coolest white dwarfs in the Galaxy.

At these temperatures there is no possibility of the carbon undergoing chemical reactions, it is completely ionised; the carbon and oxygen nuclei are in a crystalline lattice at these densities, surrounded by a degenerate electron gas. There is evidence that crystallisation does take place, via asteroseismology of some pulsating massive white dwarfs.

The details of the crystalline structure in these objects is unknown, and the subject of theoretical investigation. However, diamond is pure carbon and white dwarfs are expected to be a carbon/oxygen mixture. A further complication is that the process of crystallisation may be accompanied by gravitational separation of the carbon and oxygen, so that the inner core is more oxygen-rich than the outer core.

Original ideas were that the crystalline form would be body-centred cubic (bcc), but other more complex possibilites are opened up by the mixture of carbon and oxygen. bcc Carbon would be a new allotrope of carbon and not like diamond - it is a denser way of arranging the nuclei.

EDIT: To answer a point in the comments. Even if you were to wait trillions of years and allow white dwarfs to cool to the thousands or even hundreds of degrees that you might think would allow electrons to recombine and for chemistry to occur, that is not how it works. In the degenerate electron gas, the typical Fermi energy of the electrons is an MeV or so, compared with the eV-keV of bound electron states, and this is completely independent of the temperature. So the high electron number densities ensure that they will never recombine with the carbon nuclei (a theory first developed by Kothari 1938).