What was done
The authors removed intact soil samples supporting mixed grassland species from a New Zealand pasture and exposed them to 350 or 700 ppm CO2 for 15 months before withholding water from half of them for six weeks to induce water stress.  This manipulation allowed them to study the interactive effects of elevated CO2 and soil moisture deficit on growth of natural grassland communities composed primarily of several C3 species (Trifolium repens, Holcus lanatus, and Plantago lanceolata) and one C4 species (Paspalum dilatatum).

What was learned
Leaf water potentials significantly declined in all species with water stress, but plants grown in elevated CO2 consistently displayed values that were higher (less negative and therefore less stressful) than those observed in plants grown in ambient CO2.  Elevated CO2 increased rates of net photosynthesis in leaves of all species, regardless of soil moisture content, with the greatest photosynthetic stimulation occurring during water stress.  Trifolium repens, for example, exhibited CO2-induced increases in photosynthesis of approximately 50 and 300% for well-watered and water-stressed conditions, respectively.  Such increases in photosynthesis contributed to greater water-use efficiencies as calculated by the authors.

What it means
As the CO2 content of the air rises, it is likely that temperate grassland communities in New Zealand, composed of both C3 and C4 species, will exhibit significant increases in productivity, even in times of reduced soil moisture availability.  Moreover, with more CO2 in the air, mixed pasture communities will likely display increases in water-use efficiency, which may allow them to expand their current ranges.