Terrestrial photosynthesis is the largest flux of carbon dioxide between the atmosphere and the Earth’s surface. Photosynthesis is a dynamic process that shows strong acclimation to environmental conditions, making predictions difficult under non-stable environments. Optimality theory provides an avenue for predicting photosynthetic acclimation. Here, we present a novel theory of optimal plant photosynthesis for C3 and C4 species. We then use the theory as a null model to help better understand acclimation processes over space and time. Specifically, we use the theory to show that photosynthetic acclimation to future warming and elevated CO2 results in nitrogen savings at the leaf level. This is driven almost exclusively by optimal downregulation of Rubisco carboxylation capacity, without consideration of soil nitrogen availability constraints. This result runs counter to predictions from the progressive nitrogen limitation hypothesis. We further find that soil nitrogen availability has little impact on leaf-level photosynthesis, in line with prediction from optimality, but that soil nitrogen does stimulate whole-plant photosynthesis by increasing leaf area. Finally, we find that C4 photosynthesis is not likely to be more advantageous than C3 photosynthesis in the future under most conditions. These results demonstrate the power of optimality theory for elucidating the mechanisms underlying plant physiological process responses to variable environmental conditions.