Exposure of plants to ozone inhibits photosynthesis and therefore reduces vegetation production and carbon sequestration. The damaging effects of tropospheric ozone vary spatially because human activities responsible for the emissions of ozone precursors are highly concentrated in urban and industrial centers. We developed scenarios of ozone-precursor emissions and the resultant ozone concentrations using the MIT Integrated Global Systems Model (IGSM) through the year 2100 and explored the consequent effects on terrestrial ecosystems using the Terrestrial Ecosystem Model (TEM). We then used the Emissions Prediction and Policy Analysis (EPPA) model, a component of the IGSM, to evaluate the cost of increased mitigation efforts required to offset lost carbon sequestration. We considered both a global climate policy that limits future greenhouse gas (GHG) emissions and an air quality policy that limits pollutant emissions to their 1995 levels in the developed countries. We also considered agricultural management that includes optimal irrigation and fertilization and no irrigation and fertilization for croplands. We found that the loss of carbon sequestration in the U.S. at the end of the 21st century due to ozone pollution ranged from negligible to as much as 0.3 PgC yr$^{-1}$ depending upon the policy options pursued. We valued these reductions in terms of the change in the net present value of the cost to the U.S. through 2100 of a global carbon policy designed to approximately stabilize atmospheric CO$_{2}$ levels at 550 ppm. For the U.S., failure to consider ozone damages to vegetation would by itself raise the costs over the next century of stabilizing atmospheric concentrations of CO$_{2}$ by 11 to 19% (\$0.3 to \$0.6 trillion) because emissions from fossil fuels will need to be reduced more to compensate for the reduced carbon sequestration by terrestrial ecosystems. With a pollution cap, damages are reduced to 6 to 12% (\$0.2 to \$0.3 trillion) of the total cost. However, climate policy that reduces fossil fuel use and methane emissions would also reduce the emissions of the ozone precursors and therefore, ozone concentrations and ozone damages. The savings in reduced carbon emissions reductions costs are estimated to be between 1 and 17% (\$0.09 to \$0.3 trillion) of the cost of the climate policy. The cost estimates are sensitive to the assumed 5% discount rate and the details of the climate policy and how the burden is allocated among countries. Tropospheric ozone effects on terrestrial ecosystems produce a surprisingly large feedback in estimating climate policy costs that, heretofore, has not been included in cost estimates.