Smart choices for growth. Bruegel Policy Contribution 2012/21, November 2012

Recovery in Greece, Italy, Portugal and Spain is held back in part by structural barriers. Overcoming these requires structural reform and public investment. Given the limited availability of political and financial capital, prioritising reform efforts and spending is important, but difficult. The different success factors for individual sectors are complementary. Using the example of the high-tech industry, we make the case that only investing in one success factor (eg broadband infrastructure) without having a sufficient endowment of others (eg education) is unlikely to make the sector successful. One consequence of the complementarity of the different success factors is that public investment and reform efforts should be fine-tuned in order to match the endowment of other factors. This might imply an increase in efforts to tackle several structural barriers at the same time, but it might also imply reducing investment in less promising fields. This in turn requires strategic thinking about whether it is worthwhile pursuing development strategies that require investment in many success factors but that do not promise much success. Such a strategic approach to public investment and reform efforts might make the allocation of scarce public financial and political capital more efficient.

Global observations and forecast skill

The impact of selected observing systems on forecast skill is explored using the European Centre for Medium-Range Weather Forecasts (ECMWF) 40-yr reanalysis (ERA-40) system. Analyses have been produced for a surface-based observing system typical of the period prior to 1945/1950, a terrestrial-based observing system typical of the period 1950-1979 and a satellite-based observing system consisting of surface pressure and satellite observations. Global prediction experiments have been undertaken using these analyses as initial states, and which are available every 6 h, for the boreal winters of 1990/1991 and 2000/2001 and the summer of 2000, using a more recent version of the ECMWF model. The results show that for 500-hPa geopotential height, as a representative field, the terrestrial system in the Northern Hemisphere extratropics is only slightly inferior to the control system, which makes use of all observations for the analysis, and is also more accurate than the satellite system. There are indications that the skill of the terrestrial system worsens slightly and the satellite system improves somewhat between 1990/1991 and 2000/2001. The forecast skill in the Southern Hemisphere is dominated by the satellite information and this dominance is larger in the latter period. The overall skill is only slightly worse than that of the Northern Hemisphere. In the tropics (20 degrees S-20 degrees N), using the wind at 850 and 250 hPa as representative fields, the information content in the terrestrial and satellite systems is almost equal and complementary. The surface-based system has very limited skill restricted to the lower troposphere of the Northern Hemisphere. Predictability calculations show a potential for a further increase in predictive skill of 1-2 d in the extratropics of both hemispheres, but a potential for a major improvement of many days in the tropics. As well as the Eulerian perspective of predictability, the storm tracks have been calculated from all experiments and validated for the extratropics to provide a Lagrangian perspective.

Decadal predictability of the Atlantic Ocean in a coupled GCM: forecast skill and optimal perturbations using Linear Inverse Modelling

The decadal predictability of three-dimensional Atlantic Ocean anomalies is examined in a coupled global climate model (HadCM3) using a Linear Inverse Modelling (LIM) approach. It is found that the evolution of temperature and salinity in the Atlantic, and the strength of the meridional overturning circulation (MOC), can be effectively described by a linear dynamical system forced by white noise. The forecasts produced using this linear model are more skillful than other reference forecasts for several decades. Furthermore, significant non-normal amplification is found under several different norms. The regions from which this growth occurs are found to be fairly shallow and located in the far North Atlantic. Initially, anomalies in the Nordic Seas impact the MOC, and the anomalies then grow to fill the entire Atlantic basin, especially at depth, over one to three decades. It is found that the structure of the optimal initial condition for amplification is sensitive to the norm employed, but the initial growth seems to be dominated by MOC-related basin scale changes, irrespective of the choice of norm. The consistent identification of the far North Atlantic as the most sensitive region for small perturbations suggests that additional observations in this region would be optimal for constraining decadal climate predictions.

Stratospheric Memory and Skill of Extended-Range Weather Forecasts

We use an empirical statistical model to demonstrate significant skill in making extended-range forecasts of the monthly-mean Arctic Oscillation (AO). Forecast skill derives from persistent circulation anomalies in the lowermost stratosphere and is greatest during boreal winter. A comparison to the Southern Hemisphere provides evidence that both the time scale and predictability of the AO depend on the presence of persistent circulation anomalies just above the tropopause. These circulation anomalies most likely affect the troposphere through changes to waves in the upper troposphere, which induce surface pressure changes that correspond to the AO.