Peat soils drained for agriculture and forestry are important sources of carbon dioxide and nitrous oxide. Rewetting effectively reduces these emissions. However, rewetting also increases methane emissions from the soil and, on forestry-drained peatlands, decreases the carbon storage of trees. To analyze the effect of peatland rewetting on the climate, we built radiative forcing scenarios for tropical peat soils, temperate and boreal agricultural peat soils, and temperate and boreal forestry-drained peat soils. The effect of tree and wood product carbon storage in boreal forestry-drained peatlands was also estimated as a case study for Finland. Rewetting of tropical peat soils resulted in immediate cooling. In temperate and boreal agricultural peat soils, the warming effect of methane emissions offsets a major part of the cooling for the first decades after rewetting. In temperate and boreal forestry-drained peat soils, the effect of rewetting was mostly warming for the first decades. In addition, the decrease in tree and wood product carbon storage further delayed the onset of the cooling effect for decades. Global rewetting resulted in increasing climate cooling, reaching −70 mW (m 2 Earth) −1 in 100 years. Tropical peat soils (9.6 million ha) accounted for approximately two thirds and temperate and boreal agricultural peat soils (13.0 million ha) for one third of the cooling. Forestry-drained peat soils (10.6 million ha) had a negligible effect. We conclude that peatland rewetting is beneficial and important for mitigating climate change, but abandoning tree stands may instead be the best option concerning forestry-drained peatlands. Peatlands are important regulators of atmospheric greenhouse gas concentrations and the climate. Undrained peatlands are, on the one hand, carbon dioxide (CO 2) sinks due to peat accumulation (e.g., Loisel et al., 2014; Yu, 2011). On the other hand, they are methane (CH 4) sources due to favorable methanogenesis conditions (e.g.