The concentration of CO2 in the atmosphere has been rising steady for some time now. There are two main potential direct effects of this fertilization. The first is a direct increase in photosynthesis, the second a reduced use of water.
At its simplest, the reduced use of water should increase plant production in drier habitats by increasing soil water availability. Less water is used by plants for a given amount of photosynthesis, means more water in the soil, and more productivity before soils dry out.
Theoretically this straightforward, but whether this has happened in ecosystems across the Earth or not is an open question.
Peñuelas, Canadell, and Ogaya synthesized data on two parameters for 47 forests across the world. The first was the C isotope composition of tree rings, which can be used to infer instantaneous water use efficiency. The second was the growth rate of trees themselves--limiting measurements to well-established forests.
Their results are pretty clear. Across a wide range of forests, over the past 40 years trees have been 20% more efficient with water when they photosynthesize.
If trees are primarily limited by water, they should be producing 20% more wood. Yet, there was no significant increase in productivity in tree growth in any region.
If plants are more efficient with water, then what could be holding back plants?
The authors write, "Other factors such as increasing temperature, drought, nutrient limitation and/or plant acclimation may preclude such growth increase."
Which might it be?
The next chapter in this question is going to be pretty interesting.
Peñuelas, J., J. G. Canadell, and R. Ogaya. 2011. Increased water-use efficiency during the 20th century did not translate into enhanced tree growth. Global Ecology and Biogeography 20:597-608.