Higher transpiration efficiency (TE) has been proposed as a mechanism to increase crop yields in dry environments where water availability usually limits yield. The application of a coupled radiation and transpiration efficiency simulation model shows wheat yield advantage of a high TE cultivar (cv. Drysdale) over its almost identical low TE parent line (Hartog), from about -7 to 558 kg ha-1 (mean 187 kg ha-1 ) over the rainfed cropping region in Australia (221 to 1351 mm annual rainfall), under the present-day climate. The smallest absolute yield response occurred in the more extreme drier and wetter areas of the wheat belt. However, under elevated CO2 conditions, the response of Drysdale was much greater overall, ranging from 51 to 886 kg ha-1 (mean 284 kg ha-1 ) with the greatest response in the higher rainfall areas. Changes in simulated TE under elevated CO2 conditions are seen across Australia with notable increased areas of higher TE under a drier climate in Western Australia, Queensland and parts of New South Wales and Victoria. This improved efficiency is subtly deceptive, with highest yields not necessarily directly correlated with highest TE. Nevertheless, the advantage of Drysdale over Hartog is clear with the benefit of the trait advantage attributed to TE ranging from 102 to 118% (mean 109%). The potential annual cost-benefits of this increased genetic TE trait across the wheat growing areas of Australia (5 year average of area planted to wheat) totaled AUD 631 MIL (5 year average wheat price of AUD 260 t-1 ) with an average of 187 kg ha-1 under the present climate. The benefit to an individual farmer will depend on location but elevated CO2 raises this nation-wide benefit to AUD 796 MIL in a 2°C warmer climate, slightly lower (AUD 715 MIL) if rainfall is also reduced by 20%. This article is protected by copyright. All rights reserved.