AbstractThe majority of northern peatlands were initiated during the Holocene. Owing to their mass imbalance, they have sequestered huge amounts of carbon in terrestrial ecosystems. Although recent syntheses have filled some knowledge gaps, the extent and remoteness of many peatlands pose challenges to developing reliable regional carbon accumulation estimates from observations. In this work, we employed an individual‐ and patch‐based dynamic global vegetation model (LPJ‐GUESS) with peatland and permafrost functionality to quantify long‐term carbon accumulation rates in northern peatlands and to assess the effects of historical and projected future climate change on peatland carbon balance. We combined published datasets of peat basal age to form an up‐to‐date peat inception surface for the pan‐Arctic region which we then used to constrain the model. We divided our analysis into two parts, with a focus both on the carbon accumulation changes detected within the observed peatland boundary and at pan‐Arctic scale under two contrasting warming scenarios (representative concentration pathway—RCP8.5 and RCP2.6). We found that peatlands continue to act as carbon sinks under both warming scenarios, but their sink capacity will be substantially reduced under the high‐warming (RCP8.5) scenario after 2050. Areas where peat production was initially hampered by permafrost and low productivity were found to accumulate more carbon because of the initial warming and moisture‐rich environment due to permafrost thaw, higher precipitation and elevated CO2 levels. On the other hand, we project that areas which will experience reduced precipitation rates and those without permafrost will lose more carbon in the near future, particularly peatlands located in the European region and between 45 and 55°N latitude. Overall, we found that rapid global warming could reduce the carbon sink capacity of the northern peatlands in the coming decades.