Afforestation is considered a cost‐effective and readily available climate change mitigation option. In recent studies afforestation is presented as a major solution to limit climate change. However, estimates of afforestation potential vary widely. Moreover, the risks in global mitigation policy and the negative trade‐offs with food security are often not considered. Here we present a new approach to assess the economic potential of afforestation with the IMAGE 3.0 integrated assessment model framework. In addition, we discuss the role of afforestation in mitigation pathways and the effects of afforestation on the food system under increasingly ambitious climate targets. We show that afforestation has a mitigation potential of 4.9 GtCO2/year at 200 US$/tCO2 in 2050 leading to large‐scale application in an SSP2 scenario aiming for 2°C (410 GtCO2 cumulative up to 2100). Afforestation reduces the overall costs of mitigation policy. However, it may lead to lower mitigation ambition and lock‐in situations in other sectors. Moreover, it bears risks to implementation and permanence as the negative emissions are increasingly located in regions with high investment risks and weak governance, for example in Sub‐Saharan Africa. Afforestation also requires large amounts of land (up to 1,100 Mha) leading to large reductions in agricultural land. The increased competition for land could lead to higher food prices and an increased population at risk of hunger. Our results confirm that afforestation has substantial potential for mitigation. At the same time, we highlight that major risks and trade‐offs are involved. Pathways aiming to limit climate change to 2°C or even 1.5°C need to minimize these risks and trade‐offs in order to achieve mitigation sustainably.