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Encroachment of vascular plants (VP) in temperate raised bogs, as a consequence of altered hydrological conditions and nutrient input, is widely observed. Effects of such vegetation shift on water and carbon cycles are, however, largely unknown and identification of responsible plant physiological traits is challenging. Process-based modelling offers the opportunity of gaining insights into ecosystem functioning beyond observations, and to infer decisive trait shifts of plant functional groups. We adapted the Soil–Vegetation–Atmosphere Transfer model pyAPES to a temperate raised bog site by calibration against measured peat temperature, water table and surface CO2 fluxes. We identified the most important traits determining CO2 fluxes by conducting Morris sensitivity analysis (MSA) under changing conditions throughout the year and simulated VP encroachment. We further investigated transferability of results to other sites by extending MSA to parameter ranges derived from literature review. We found highly variable intra-annual plant traits importance determining ecosystem CO2 fluxes, but only a partial shift of importance of photosynthetic processes from moss to VP during encroachment. Ecosystem respiration was dominated by peat respiration. Overall, carboxylation rate, base respiration rate and temperature sensitivity (Q10) were most important for determining bog CO2 balance and parameter ranking was robust even under the extended MSA. [ABSTRACT FROM AUTHOR]