The tropical peat swamp forests of South‐East Asia are being rapidly converted to agricultural plantations of oil palm and Acacia creating a significant global “hot‐spot” for CO2 emissions. However, the effect of this major perturbation has yet to be quantified in terms of global warming potential (GWP) and the Earth's radiative budget. We used a GWP analysis and an impulse‐response model of radiative forcing to quantify the climate forcing of this shift from a long‐term carbon sink to a net source of greenhouse gases (CO2 and CH4). In the GWP analysis, five tropical peatlands were sinks in terms of their CO2 equivalent fluxes while they remained undisturbed. However, their drainage and conversion to oil palm and Acacia plantations produced a dramatic shift to very strong net CO2‐equivalent sources. The induced losses of peat carbon are ~20× greater than the natural CO2 sequestration rates. In contrast, a radiative forcing model indicates that the magnitude of this shift from a net cooling to warming effect is ultimately related to the size of an individual peatland's carbon pool. The continuous accumulation of carbon in pristine tropical peatlands produced a progressively negative radiative forcing (i.e., cooling) that ranged from −2.1 to −6.7 nW/m2 per hectare peatland by 2010 CE, referenced to zero at the time of peat initiation. Peatland conversion to plantations leads to an immediate shift from negative to positive trend in radiative forcing (i.e., warming). If drainage persists, peak warming ranges from +3.3 to +8.7 nW/m2 per hectare of drained peatland. More importantly, this net warming impact on the Earth's radiation budget will persist for centuries to millennia after all the peat has been oxidized to CO2. This previously unreported and undesirable impact on the Earth's radiative balance provides a scientific rationale for conserving tropical peatlands in their pristine state.