Terrestrial ecosystems of the northern high latitudes (above 50°N) exchange large amounts of CO₂ and CH₄ with the atmosphere each year. Here we use a process‐based model to estimate the budget of CO₂ and CH₄ of the region for current climate conditions and for future scenarios by considering effects of permafrost dynamics, CO₂ fertilization of photosynthesis and fire. We find that currently the region is a net source of carbon to the atmosphere at 276 Tg C yr^‐1. We project that throughout the 21st century, the region will most likely continue as a net source of carbon and the source will increase by up to 473 Tg C yr⁻¹ by the end of the century compared to the current emissions. However our coupled carbon and climate model simulations show that these emissions will exert relatively small radiative forcing on global climate system compared to large amounts of anthropogenic emissions.