A moving target: trade-offs between maximizing carbon and minimizing hydraulic stress for plants in a changing climate

center dot Observational evidence indicates that tree leaf area may acclimate in response to changes in water availability to alleviate hydraulic stress. However, the underlying mechanisms driving leaf area changes and consequences of different leaf area allocation strategies remain unknown. center dot Here, we use a trait-based hydraulically enabled tree model with two endmember leaf area allocation strategies, aimed at either maximizing carbon gain or moderating hydraulic stress. We examined the impacts of these strategies on future plant stress and productivity. center dot Allocating leaf area to maximize carbon gain increased productivity with high CO2, but systematically increased hydraulic stress. Following an allocation strategy to avoid increased future hydraulic stress missed out on 26% of the potential future net primary productivity in some geographies. Both endmember leaf area allocation strategies resulted in leaf area decreases under future climate scenarios, contrary to Earth system model (ESM) predictions. center dot Leaf area acclimation to avoid increased hydraulic stress (and potentially the risk of accelerated mortality) was possible, but led to reduced carbon gain. Accounting for plant hydraulic effects on canopy acclimation in ESMs could limit or reverse current projections of future increases in leaf area, with consequences for the carbon and water cycles, and surface energy budgets.