Potential energy curves for the ground and five valence excited states of IBr^- were calculated at the MRCI level using the MOLPRO ab initio package. The Stuttgart large-core MDF ECP was used with an augmented basis set and spin-orbit coupling was calculated via the accompanying spin-orbit ECP. Charge densities, transition moments, and nonadiabatic coupling matrix elements constructed from a distributed multipole analysis of the ab initio wavefunctions were then used to carry out molecular dynamics simulations of the photodissociation of IBr^- in CO₂ clusters with nonadiabatic transitions treated by Tully's fewest-switches surface hopping. Simulations of near-infrared (790-nm) photodissociation show good agreement with experimental product branching ratios. Experimental pump-probe studies have demonstrated a large variation in ground-state recombination times with cluster size---orders of magnitude---which is supported by our simulations. We propose a mechanism of excited-state trapping and a solvent-mediated configurational transition state which leads to similar simulated recombination times on the order of 10-20 ps for a cluster size of 5 solvent molecules, and up to 1-3 ns for sizes of 8 to 10. Simulations have predicted a turnaround in recombination times at larger clusters, a finding which is supported by recent experimental investigations. We also predict that a cluster size of 14 solvent molecules leads to double timescale recombination---picoseconds and nanoseconds---involving a different, excited-state well. Simulations of ultraviolet (355-nm) photodissociation were also carried out. These gave worse agreement, probably due to the larger amounts of kinetic energy release associated with this excitation, and to the absence of a spin-orbit quenching process, thought to be relevant in experiment, from the model.