Tropical peatlands are threatened by climate and land-use changes, but there remain substantial uncertainties about their present and future role in the global carbon cycle due to limited measurements. Here, we present measurements of CO2 and CH4 emissions between mid-2017 and mid-2020 as well as N2O emissions between 2019 and 2020 at two contrasting sites in a coastal peatland in Sumatra, Indonesia. We find that greenhouse gas emissions from intact peatlands increased significantly due to an extreme drought caused by a positive Indian Ocean Dipole phase combined with El Niño. The emission in the degraded site was two times greater than at the intact site. The smaller emission in the intact peatland suggests that protecting the remaining intact tropical peatlands from degradation offers significant climate benefits, avoiding greenhouse gas emissions of 23 ± 5 tCO2e ha−1 yr−1 (average ± standard deviation) at our study site in Indonesia.