Carbon offsetting of fossil fuel emissions through afforestation is limited by financial viability and spatial requirements

Burning the reserves of the 200 largest fossil fuel companies could generate 673 gigatonnes of carbon dioxide, far exceeding the remaining 400-gigatonne budget needed to limit warming to 1.5 °C by 2050. Rapid action is needed to reduce, or where necessary, offset emissions from burning fossil fuels but it remains unclear who will bear the cost. Our study aims to show the limits of offsetting using reserve data from the 200 largest fossil fuel companies sourced from Fossil Free Funds and carbon capture rates from peer-reviewed ecological studies. We show that if the cost of offsetting fossil fuel emissions exceeds $150 per tonne of carbon dioxide, fossil fuel companies could have negative market valuations. Using the social cost of carbon, we find the climate-related externalities associated with these reserves exceed their market valuation. Afforestation is often proposed as a carbon sequestration solution, but offsetting emissions from fossil fuel reserves would require covering an area the size of North and Central America solely with trees, displacing communities, farmland and existing habitats. Afforestation, while more economical could disrupt existing ecosystems that provide vital ecosystem services.