Contact: Stephanie Kenitzer FOR IMMEDIATE RELEASE
(301) 713-0622 4/19/95
Improved long-range forecasts of El Ni¤o/Southern Oscillation (ENSO) from the National Weather Service can result in an economic benefit worth $100-$125 million per year to the agriculture sector in the southeastern United States, according to an analysis to be published in the July Contemporary Economic Policy journal.
The study was supported by the Commerce Department's National Oceanic and Atmospheric Administration, one of the agencies involved in the observation, monitoring and prediction of the ENSO phenomenon.
"This study clearly demonstrates the economic benefits of improved long range forecasting," said Commerce Secretary Ronald H. Brown. "It is yet another example of how we can use advanced technology to create economic opportunity."
ENSO is the most prominent known source of inter-annual variability in weather and climate around the world. The Southern Oscillation is a global-scale "seesaw" in atmospheric pressure between Indonesia-North Australia and the southeast Pacific Ocean. In broad terms, ENSO represents a varying shift in climate conditions between a normal phase and two extreme phases: El Ni¤o and El Viejo (sometimes called La Nina).
In recent years, NOAA's ability to forecast ENSO has improved. Because these forecasts can be used to improve decisions in climate-sensitive sectors of the economy, they have a potentially large economic value.
The researchers analyzed differences in climate conditions during ENSO events and the consequences of those conditions for crop yields in the southeastern United States. In some cases, depending upon the phase of ENSO, average monthly temperature and precipitation could vary by as much as 15 percent, which in turn can lead to changes of as much as 15 percent in crop yields. Therefore, accurate long-term forecasts will allow farmers to make optimal planting and harvesting decisions.
"The study is a clear research and development success story of major payoffs for modest investments over the past decade in modeling and observing systems. As NOAA climatologists capitalize on further investments in operational observing systems and improve the science of seasonal and interannual forecasts, the United States and the global community will reap a tremendous economic benefit worth millions, even billions of dollars," said Rodney Weiher, NOAA's chief economist.
The benefits occur when weather-sensitive industries use these long-range climate forecasts as an aid in long-term planning, purchasing and decision-making. "Think of it as an improvement in technology -- improved forecasts reduce errors and wasted resources," Weiher said.
The value of a long-term forecast is reflected in the expected increase in economic benefits arising from the use of the forecast by decision makers in climate-sensitive industries such as agriculture, energy and transportation. Researchers selected the Southeast because of its agricultural importance, diversity of crops, and the relatively clear ENSO signal in its climate.
The study was conducted for NOAA by academic experts in economics, climatology and plant science. It represents the first systematic attempt to place a value on improved forecasts of long-range or ENSO-type climate phenomena.
Additional NOAA-supported studies are currently underway to estimate the benefits and applicability of improved forecasts in the entire U.S. agriculture sector; the electric power industry, with emphasis on hydropower production; natural gas storage and transmission; the performance of the commodities markets; and the use of improved global forecast in large, emerging, climate- sensitive economies like India and China.
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Editor's Note: For a copy of the study, contact Dr. Rodney Weiher at (301) 713-3562 or fax (301) 713-4101 or NOAA/National