Financial, spatial and ecological limits to fossil fuel emission offsetting

Burning all the reserves of the 200 largest fossil fuel companies could generate up to 673GtCO2. We only have a 400GtCO2 emissions budget to remain under 1.5°C global warming by 2050 according to the IPCC. Rapid action is needed to cut, or as a last resort, offset these emissions. It remains unclear who will pay to offset these emissions and how to proceed. Here we show that if the cost of offsetting is above $150 per ton of CO2, all large fossil fuel companies would have a negative market value. Using the social cost of carbon to give a valuation of fossil fuel companies, we find that they have a negative value for society. Fossil fuel companies could decide to offset their emissions by afforestation (a cheaper alternative and the most used technology today). We measure how much space would be needed to offset all the emissions from current fossil fuel reserves. We show that offsetting all reserves would require covering the equivalent of the whole of North and Central America with only trees, removing all of the people and cultivated land. Afforestation, while more economical could disrupt existing ecosystems that provide important ecosystem services.