This study compares the costs and quantity of carbon mitigation by afforestation and fossil fuel substitution based on simple mathematical models of carbon stocks and flows assuming the growth conditions of trees in the southern US. Significant carbon benefit can be obtained by substituting biomass derived from short-rotation woody crops (SRWC) for coal or gasoline as opposed to sequestering carbon in standing trees. When biomass substitutes fossil fuel, the use of a given piece of land is not limited to just the period until the forest matures, as in the case of afforestation. At present high costs of existing biomass-based technologies and unavailability of cost-effective technologies (e.g., biomass-integrated gasifier/steam-injected gas turbine (BIG/STIG)) limits carbon sequestration to afforestation/reforestation for which the costs have been found to be modest. If growth rates of trees in afforested/reforested lands could be increased to the levels that are comparable to SRWC, more carbon benefit could be realized for a short-term horizon from afforestation than using biomass to displace fossil fuels. Carbon sequestered through afforestation projects can be used to earn carbon credits to meet carbon reduction targets through Kyoto mechanisms. As biomass-based technologies such as BIG/STIG or conversion of biomass to ethanol become commercially viable in the future, growing SRWC for substituting fossil fuels may become a cost-effective strategy to combat climate change. (C) 2003 Elsevier Ltd. All rights reserved.