Experience in the cotton industry in Australia demonstrates significant sensitivity to climate factors in terms of yield and yield variability, quality, water availability, pest and weed issues, input costs and natural resource management. Consequently if the climate changes, there are likely to be systemic changes in cotton production systems. This paper will outline the climate changes that are already occurring in Australia, projections of future changes that may be of significance to the cotton industry and the likely impacts of these. This paper does not address the issue of how to sustainably reduce greenhouse gas emissions from the cotton industry as this topic is dealt with by another paper at this conference (Keogh 2008