The Snowball Earth hypothesis proposes that for a period during the Precambrian, the Earth froze over entirely or almost entirely.
The Snowball Earth hypothesis proposes that Earth surface's became
entirely or nearly entirely frozen at least once, sometime earlier
than 650 Mya (million years ago). Proponents of the hypothesis argue
that it best explains sedimentary deposits generally regarded as of
glacial origin at tropical palaeolatitudes and other enigmatic
features in the geological record... A
number of unanswered questions remain, including whether the Earth was
a full snowball, or a "slushball" with a thin equatorial band of open
(or seasonally open) water.
For this answer, the Snowball Earth event occurs instead of the Permian extinction, as stated on the question. There would be a thin band of open water at the equator (as in above image). This open water would act as a refuge for the 30% of aquatic species surviving the event. On the ice covered land only 4% of species survive: land based insect scavengers of dead fish washing up, and specialists eating snow algae.
How would the Snowball Earth come to be, you may ask? Just as with the Precambrian one - the earth cools because of volcanic winter or some similar event, new ice increases the earths albedo and reflects away heat, and runaway cooling ensues.
Many possible triggering mechanisms could account for the beginning of
a snowball Earth, such as the eruption of a supervolcano, a reduction
in the atmospheric concentration of greenhouse gases such as methane
and/or carbon dioxide, changes in solar energy output, or
perturbations of Earth's orbit. Regardless of the trigger, initial
cooling results in an increase in the area of Earth's surface covered
by ice and snow, and the additional ice and snow reflects more Solar
energy back to space, further cooling Earth and further increasing the
area of Earth's surface covered by ice and snow. This positive
feedback loop could eventually produce a frozen equator as cold as
But how, you may ask, will the Snowball Earth ever thaw? In my proposed scenario, giant burps of volcanic CO2 and microbially-produced methane from the ocean floor increase the greenhouse effect and the earth melts.
Global warming associated with large accumulations of carbon dioxide
in the atmosphere over millions of years, emitted primarily by
volcanic activity, is the proposed trigger for melting a snowball
Earth. Due to positive feedback for melting, the eventual melting of
the snow and ice covering most of Earth's surface would require as
little as a millennium.