Half of the world's forest is in boreal and sub-boreal ecozones, containing large carbon stores and fluxes. Carbon lost from headwater streams in these forests is underestimated. We apply a simple stable carbon isotope idea for quantifying the CO2 loss from these small streams; it is based only on in-stream samples and integrates over a significant distance upstream. We demonstrate that conventional methods of determining CO2 loss from streams necessarily underestimate the CO2 loss with results from two catchments. Dissolved carbon export from headwater catchments is similar to CO2 loss from stream surfaces. Most of the CO2 originating in high CO2 groundwaters has been lost before typical in-stream sampling occurs. In the Harp Lake catchment in Canada, headwater streams account for 10% of catchment net CO2 uptake. In the Krycklan catchment in Sweden, this more than doubles the CO2 loss from the catchment. Thus, even when corrected for aquatic CO2 loss measured by conventional methods, boreal and sub-boreal forest carbon budgets currently overestimate carbon sequestration on the landscape.