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Abstract Atmospheric greenhouse gases (GHGs) must be reduced to avoid an unsustainable climate. Because carbon dioxide is removed from the atmosphere and sequestered in forests and wood products, mitigation strategies to sustain and increase forest carbon sequestration are being developed. These strategies require full accounting of forest sector GHG budgets. Here, we describe a rigorous approach using over one million observations from forest inventory data and a regionally calibrated life-cycle assessment for calculating cradle-to-grave forest sector emissions and sequestration. We find that Western US forests are net sinks because there is a positive net balance of forest carbon uptake exceeding losses due to harvesting, wood product use, and combustion by wildfire. However, over 100 years of wood product usage is reducing the potential annual sink by an average of 21%, suggesting forest carbon storage can become more effective in climate mitigation through reduction in harvest, longer rotations, or more efficient wood product usage. Of the ∼10 700 million metric tonnes of carbon dioxide equivalents removed from west coast forests since 1900, 81% of it has been returned to the atmosphere or deposited in landfills. Moreover, state and federal reporting have erroneously excluded some product-related emissions, resulting in 25%–55% underestimation of state total CO₂emissions. For states seeking to reach GHG reduction mandates by 2030, it is important that state CO₂budgets are effectively determined or claimed reductions will be insufficient to mitigate climate change.