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Recent decades have been characterized by increasing temperatures worldwide, resulting in an exponential climb in vapor pressure deficit (VPD). VPD has been identified as an increasingly important driver of plant functioning in terrestrial biomes including being a major contributor in recent drought‐induced plant mortality, independently from other drivers associated with climate change. Despite this, few studies have isolated the physiological response of plant functioning to high VPD, thus limiting our understanding and ability to predict future impacts on terrestrial ecosystems. An abundance of evidence suggests that stomatal conductance declines under high VPD and transpiration increases in most species up until a given VPD threshold, leading to a cascade of subsequent impacts including reduced photosynthesis and growth, and higher risks of carbon starvation and hydraulic failure. Incorporation of photosynthetic and hydraulic traits in ‘next‐generation’ land‐surface models has the greatest potential for improved prediction of VPD responses at the plant‐ and global‐scale, and will yield more mechanistic simulations of plant responses to a changing climate. By providing a fully integrated framework and evaluation of the impacts of high VPD on plant function, improvements in forecasting and long‐term projections of climate impacts can be made.