Forestation actions are a major tool for both climate-change mitigation and biodiversity conservation, which are often considered independently. In either case, little attention is given to the potential of the vast drylands, and the albedo warming effect associated with such forestation efforts. We propose an approach to identify suitable land for forestation and quantify its ‘net equivalent carbon stock change’ over 80 years of forests lifetime (Ceq-80), accounting for both carbon sequestration and albedo changes. Applying it over Queensland as a test case shows that albedo effects reduce the carbon sequestration cooling effects by >50%, with residual Ceq-80 of 0.72 Gt, equivalent to 15% of the state’s projected carbon emissions for the same time. Our methodology extends restoration efforts by identifying new land for forestation and demonstrates the importance of quantifying the climatic value of forestation in drylands, which must also be considered in biodiversity conservation efforts.