Background
The authors write that "global warming is predicted to induce desiccation in many world regions through increases in evaporative demand," but they say that "rising CO2 may counter that trend by improving plant water-use efficiency." However, they are very forthright in noting that "it is not clear how important this CO2-enhanced water use efficiency might be in offsetting warming-induced desiccation because higher CO2 also leads to higher plant biomass, and therefore greater transpirational surface."

What was done
To explore these issues in a real-world setting, Morgan et al. conducted a Prairie Heating and CO2 Enrichment (PHACE) experiment, in which they evaluated the productivity of native mixed-grass prairie west of Cheyenne, Wyoming (USA) to two levels of atmospheric CO2 concentration (385 and 600 ppm, supplied via standard FACE technology) and two temperature regimes -- ambient and elevated (ambient plus 1.5/3.0°C warmer day/night temperatures) that were maintained for three full growing seasons (2007-2009) by means of T-FACE technology (Kimball et al., 2008) -- after first having measured grassland productivity under unmodified conditions for one growing season (2005) and with CO2 enrichment alone for a second season (2006).

What was learned
The ten researchers report that their warming treatment reduced annual soil water content by 13.1%, but that their elevated CO2 treatment increased annual soil water content by 17.3%, demonstrating that "the water conservation effects of elevated CO2 can completely cancel the desiccating effects of moderately warmer temperatures." In addition, they found that "exposure of the prairie to 600 ppm CO2 increased peak total above-ground biomass by an average 33% in the first 3 years of the experiment when annual precipitation amounts were within 7% of the site's 132-year average of 388 mm," but that "CO2 enrichment had no effect on above-ground biomass in 2009," when "annual precipitation was 17% higher than the long-term mean." And they speculate, in this regard, that the "higher soil water content in 2009 minimized the potential water-relations benefit of CO2 enrichment on plant productivity."

What it means
Morgan et al. indicate that "many believe that CO2-induced reductions in transpiration at the leaf level will be largely offset at the canopy level by increases in leaf area," citing the studies of McNaughton and Jarvis (1991), Piao et al. (2007), Frelich and Reich (2010) and Seager and Vecchi (2010). However, they are fully justified in stating, in the final sentence of the body of their paper, that their results "clearly illustrate the importance of compensating CO2 and warming effects in semi-arid ecosystems," and declaring in the final sentence of the abstract of their paper that their results "indicate that in a warmer, CO2-enriched world, both soil water content and productivity in semi-arid grasslands may be higher than previously expected." In addition, in an accompanying commentary on their paper, Baldocchi (2011) writes that "Morgan and colleagues provide one of the first and best views of how a mixed-grass ecosystem growing in a semi-arid climate will respond to future CO2 and climatic conditions." And, last of all, Morgan et al.'s findings help to explain the great greening of the earth phenomenon, especially as it pertains to semi-arid regions of the planet.

References
Baldocchi, D. 2011. The grass response. Nature 476: 160-161.

Frelich, L.E. and Reich, P.B. 2010. Will environmental changes reinforce the impact of global warming on the prairie-forest border of central north America? Frontiers in Ecology and the Environment 8: 371-378.

Kimball, B.A., Conley, M., Wang, S., Xingwu, L., Morgan, J. and Smith, D. 2008. Infrared heater arrays for warming ecosystem field plots. Global Change Biology 14: 309-320.

McNaughton, K.G. and Jarvis, P.G. 1991. Effects of spatial scale on stomatal control of transpiration. Agricultural and Forest Meteorology 54: 279-301.

Piao, S., Friedlingstein, P., Ciais, P., de Noblet-Ducoudre, N., Labat, D. and Zaehle, S. 2007. Changes in climate and land use have a larger direct impact than rising CO2 on global river runoff trends. Proceedings of the National Academy of Sciences USA 104: 15,242-15,247.

Seager, R. and Vecchi, G.A. 2010. Greenhouse warming and the 21st century hydroclimate of southwestern North America. Proceedings of the National Academy of Sciences USA 107: 21,277-21,282.