Drought can offset potential water use efficiency of forest ecosystems from rising atmospheric CO.

Increasing atmospheric CO is both leading to climate change and providing a potential fertilisation effect on plant growth. However, southern Australia has also experienced a significant decline in rainfall over the last 30 years, resulting in increased vegetative water stress. To better understand the dynamics and responses of Australian forest ecosystems to drought and elevated CO, the magnitude and trend in water use efficiency (WUE) of forests, and their response to drought and elevated CO from 1982 to 2014 were analysed, using the best available model estimates constrained by observed fluxes from simulations with fixed and time-varying CO. The ratio of gross primary productivity (GPP) to evapotranspiration (ET) (WUEe) was used to identify the ecosystem scale WUE, while the ratio of GPP to transpiration (Tr) (WUEc) was used as a measure of canopy scale WUE. WUE increased significantly in northern Australia (p < 0.001) for woody savannas (WSA), whereas there was a slight decline in the WUE of evergreen broadleaf forests (EBF) in the southeast and southwest of Australia. The lag of WUEc to drought was consistent and relatively short and stable between biomes (≤3 months), but notably varied for WUEe, with a long time-lag (mean of 10 months). The dissimilar responses of WUEe and WUEc to climate change for different geographical areas result from the different proportion of Tr in ET. CO fertilization and a wetter climate enhanced WUE in northern Australia, whereas drought offset the CO fertilization effect in southern Australia.