Permafrost peatlands store large amounts of carbon potentially vulnerable to decomposition. However, the fate of that carbon in a changing climate remains uncertain in models due to complex interactions among hydrological, biogeochemical, microbial, and plant processes. In this study, we estimated effects of climate forcing biases present in global climate reanalysis products on carbon cycle predictions at a thawing permafrost peatland in subarctic Sweden. The analysis was conducted with a comprehensive biogeochemical model (ecosys) across a permafrost thaw gradient encompassing intact permafrost palsa with an ice core and a shallow active layer, partly thawed bog with a deeper active layer and a variable water table, and fen with a water table close to the surface, each with distinct vegetation and microbiota. Using in situ observations to correct local cold and wet biases found in the Global Soil Wetness Project Phase 3 (GSWP3) climate reanalysis forcing, we demonstrate good model performance by comparing predicted and observed carbon dioxide (CO2) and methane (CH4) exchanges, thaw depth, and water table depth. The simulations driven by the bias-corrected climate suggest that the three peatland types currently accumulate carbon from the atmosphere, although the bog and fen sites can have annual positive radiative forcing impacts due to their higher CH4 emissions. Our simulations indicate that projected precipitation increases could accelerate CH4 emissions from the palsa area, even without further degradation of palsa permafrost. The GSWP3 cold and wet biases for this site significantly alter simulation results and lead to erroneous active layer depth (ALD) and carbon budget estimates. Biases in simulated CO2 and CH4 exchanges from biased climate forcing are as large as those among the thaw stages themselves at a landscape scale across the examined permafrost thaw gradient. Future studies should thus not only focus on changes in carbon budget associated with morphological changes in thawing permafrost, but also recognize the effects of climate forcing uncertainty on carbon cycling.