Contact:  Stephanie Kenitzer        FOR IMMEDIATE RELEASE
                                    August 12, 1997
               

Long-range forecasts of the El Nino/Southern Oscillation (ENSO) phenomenon -- significantly improved in recent years -- by the National Oceanic and Atmospheric Administration and other entities could result in economic benefits of between $240-$324 million per year to U.S. consumers and producers in the agriculture sector, according to a study to be published in an upcoming issue of Climatic Change, a prominent journal dealing with climate issues.

A related cost-benefit analysis by academic experts of investments in research and observing systems to achieve and maintain improved ENSO forecast capabilities indicates real economic returns of 13 to 26 percent to the United States.

In recent years, NOAA's ability to forecast ENSO has improved significantly. These improved forecasts have a potentially large economic value because they enable better decisions to be made in climate-sensitive sectors of the economy.

"These studies clearly demonstrate the economic benefits of improved long-range forecasting," said NOAA Administrator D. James Baker. "It is yet another example of how investment in ocean and atmospheric research and observing systems is a sound use of public resources to produce a beneficial return for the economy."

The studies were 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.

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 Nino (warm) and La Nina (cold).

According to the latest ENSO advisories issued by NOAA's Climate Prediction Center on July 15, El Nino continues to strengthen in the tropical Pacific. Climate models indicate that the warm-episode conditions will continue throughout the remainder of the year. The latest ENSO advisories are available via the Internet at http://nic.fb4.noaa.gov

For the agricultural study, researchers analyzed differences in climate conditions during ENSO events and the consequences of those conditions for crop yields in the United States. In some cases, depending upon the phase of ENSO, average monthly temperature and precipitation can change simulated yields of important crops such as corn, wheat and soybeans by as much as 15 to nearly 30 percent Therefore, accurate long-term forecasts will allow farmers to make optimal planting and harvesting decisions, benefiting American consumers and exporters by lower prices.

"Advanced knowledge of the ENSO phase provides advanced knowledge of climate conditions, which in turn allows farmers to make decisions to maximize agricultural yield," said Rodney Weiher, NOAA's chief economist. A separate cost-benefit study compared the costs of a successful 10-year international effort to model and understand ENSO with the benefits of climate forecasts only in the U.S. agriculture sector. The study also took into account future costs of maintaining and improving the ENSO observing system. Using sensitivity analysis, real economic returns on investments by the U.S. is at least 13 to 26 percent. This is substantially above the 7 percent government minimum required rate of return on public investments, said Peter Sassone, professor at the Georgia Institute of Technology and author of the study.

"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," added Baker. "As 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."

The studies were undertaken by academic experts in economics, climatology and plant science from Texas A&M, Florida State University, the University of Arkansas, Oregon State University, the Georgia Institute of Technology and Woods Hole. These studies represent the first systematic attempts 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 application of improved forecasts in the electric power industry, with emphasis on hydropower production; natural gas storage and transmission; the commodities markets; and the use of improved global forecast in climate-sensitive economies like Latin America and China.