Arctic coastal permafrost erosion is projected to increase by a factor of 2-3 by 2100. However, organic matter (OM) fluxes from the coastal permafrost into the ocean have not been considered in Earth system models (ESMs) so far. Here, we represent coastal permafrost erosion in an ESM, and perform simulations with varying permafrost OM properties, such as sinking fraction and nutrient content. We find that coastal erosion reduces the Arctic Ocean CO2 uptake from the atmosphere in all simulations: by 4.6-13.2 TgC/year by 2100, which is about 7-14% of the Inner Arctic uptake. We show that coastal permafrost erosion exerts a positive biogeochemical feedback on climate, increasing atmospheric CO2 by 1-2 TgC/year per degree-C of increase in global surface air temperature. We thereby recommend that coastal permafrost erosion be considered in future climate projections.