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The potential role of the impacts of land-cover changes (LCCs) in the Australian climate is investigated within the context of increasing CO2 concentrations and temperature. Specifically, it is explored if possible scenarios for LCC can moderate or amplify CO2-induced changes in climate over Australia. The January climate of Australia is simulated under three different land-cover-change scenarios using a high-resolution regional climate model. The land-cover-change scenarios include a steady-state land cover that is equivalent to current land cover, a low-reforestation scenario that recovers approximately 25% of the trees replaced by grasslands within the last 200 yr, and a high-reforestation scenario that recovers at least 75% of the deforested regions. The model was driven by boundary conditions taken from transitory climate simulations from a general circulation model that included two climate scenarios based on two projected scenarios of CO2 concentration increase. The results show that reforestation has the potential to reduce the projected increase in Australian temperatures in 2050 and 2100 by as much as 40% and 20%, respectively. This cooling effect, however, is highly localized and occurs only in regions of reforestation. The results therefore hint that the potential of reforestation to moderate the impact of global warming may be significantly limited by the spatial scale of reforestation. In terms of deforestation, results show that any future land clearing can exacerbate the projected warming in certain regions of Australia. Carbon-related variables are also analyzed and results show that changes in net CO2 flux may be influenced more by soil respiration than by photosynthesis. The results herein encourage studies on the inclusion of land-cover-change scenarios in future climate change projection simulations of the Australian climate. [ABSTRACT FROM AUTHOR]