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The paper evaluates the effect of future climate change (as per the CSIRO Mk3.5 A1FI future climate projection) on cotton yield in Southern Queensland and Northern NSW, eastern Australia by using of the biophysical simulation model APSIM (Agricultural Production Systems sIMulator). The simulations of cotton production show that changes in the influential meteorological parameters caused by climate change would lead to decreased future cotton yields without the effect of CO fertilisation. By 2050 the yields would decrease by 17 %. Including the effects of CO fertilisation ameliorates the effect of decreased water availability and yields increase by 5.9 % by 2030, but then decrease by 3.6 % in 2050. Importantly, it was necessary to increase irrigation amounts by almost 50 % to maintain adequate soil moisture levels. The effect of CO was found to have an important positive impact of the yield in spite of deleterious climate change. This implies that the physiological response of plants to climate change needs to be thoroughly understood to avoid making erroneous projections of yield and potentially stifling investment or increasing risk. [ABSTRACT FROM AUTHOR]