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Land use and land cover changes greatly influence surface energy balance and consequently climate, and are likely to be associated with the persistent predictions of warming and drying throughout the Mediterranean and other regions. We specifically address the question of how the high radiation load and suppressed latent heat flux, intrinsic to dry regions, interact with land use changes and climate in these environments. We use for this purpose a detailed 6-year (2003-2008) study of the redistribution of the radiation load in an open-canopy pine forest. The results show that compared with the background shrubland, there was a 23.8 W m−2 increase in shortwave radiation load on the forest (to a mean annual net solar radiation of 211 W m−2) associated with a decrease in albedo of 0.1. Surface (skin) temperature in the forest was lower than in the shrubland (by ˜5 °C on average) due to an efficient ‘convector effect’ and the production of a large sensible heat flux (up to 926 W m−2 in summer), which effectively shifted heat from the canopy to the overlying boundary layer. The cooler forest skin temperature resulted in suppression of upwelling longwave radiation (by 25 W m−2, annual average), further increasing the forest radiation load (mean annual net radiation of 116 and 67 W m−2 for forest and shrubland, respectively). This suppression also resulted in a local ‘canopy greenhouse effect’, where upwelling longwave radiation from the ground to the canopy was larger than from the canopy to the atmosphere (by up to 150 W m−2 in summer) and was associated with ˜3 °C warming below the canopy. The ability of the dry productive forest to deal with the high radiation load indicates the potential for afforestation in dry areas.