Asia's Sovereign Wealth Funds and Reform of the Global Reserve System

This paper explores the potential contribution of Asia’s sovereign wealth funds (SWFs) to the reform of the global foreign exchange reserve system. By diversifying the investment of Asia’s huge reserves into non-dollar denominated assets, Asian SWFs can help to dilute the dominant role of the US dollar as the global reserve currency. At the same time, by exposing reserve managers to a more diverse mix of currencies and asset classes, SWFs will better prepare them for the less dollar-centric global reserve system of the future. In addition to SWFs, other innovative policy options for more active reserve management include transferring some surplus reserves into national pension funds or into exchange traded funds which are distributed among local investors. Regardless of the exact form of more profit-oriented reserve management, it will require that countries build up a critical mass of skills and expertise in wealth preservation and management.Foreign exchange reserves, global reserve system, global financial architecture, pension fund, exchange traded fund

Public Sector Investment Funds: How the Best-in-Breed Evolved

This paper looks at the evolution of ten public pension and sovereign wealth funds which have been on the cutting edge of innovation and best practice with respect to governance and investment management. The analysis is based on an inductive approach, proceeding from specific observations to general principles. In particular, we review ten case studies of individual funds from three regions – Northern Europe, Canada and Australasia. We look at three funds in Canada and one each in Australia, the Netherlands, Denmark, Norway, New Zealand, Singapore, and Sweden, using the same template for each entity. We start with a brief description of the fund and explicate its liability profile, covering the source of funding and the intended use for the assets. We then review the fund’s current governance arrangements, with a particular emphasis on how these may have helped or hindered the fund’s investment professionals in their activity. We then look at the evolution of the fund’s investment strategy, focusing in particular on asset allocation and portfolio construction. We conclude each case by highlighting a feature unique to the fund in question, which we believe is worthy of further study and emulation by their less advanced peers. At the end, we bring all of these separate strands together, with a view to formulating some general observations about how the best‐in‐breed public pension and sovereign wealth funds within our universe have evolved with respect to governance and investment strategy. Specifically, we try to determine whether the ten funds in question have been converging onto one model, or whether their experiences suggest increasing divergence. This section can effectively be viewed as a distillation of some preliminary recommendations for the less advanced funds, based on what we believe to be an emerging consensus around ‘best practice’ in public sector fund management

Attribution of chemistry-climate model initiative (CCMI) ozone radiative flux bias from satellites

The top-of-atmosphere (TOA) outgoing longwave flux over the 9.6 µm ozone band is a fundamental quantity for understanding chemistry–climate coupling. However, observed TOA fluxes are hard to estimate as they exhibit considerable variability in space and time that depend on the distributions of clouds, ozone (O3), water vapor (H2O), air temperature (Ta), and surface temperature (Ts). Benchmarking present-day fluxes and quantifying the relative influence of their drivers is the first step for estimating climate feedbacks from ozone radiative forcing and predicting radiative forcing evolution. To that end, we constructed observational instantaneous radiative kernels (IRKs) under clear-sky conditions, representing the sensitivities of the TOA flux in the 9.6 µm ozone band to the vertical distribution of geophysical variables, including O3, H2O, Ta, and Ts based upon the Aura Tropospheric Emission Spectrometer (TES) measurements. Applying these kernels to present-day simulations from the Chemistry-Climate Model Initiative (CCMI) project as compared to a 2006 reanalysis assimilating satellite observations, we show that the models have large differences in TOA flux, attributable to different geophysical variables. In particular, model simulations continue to diverge from observations in the tropics, as reported in previous studies of the Atmospheric Chemistry Climate Model Intercomparison Project (ACCMIP) simulations. The principal culprits are tropical middle and upper tropospheric ozone followed by tropical lower tropospheric H2O. Five models out of the eight studied here have TOA flux biases exceeding 100 mW m−2 attributable to tropospheric ozone bias. Another set of five models have flux biases over 50 mW m−2 due to H2O. On the other hand, Ta radiative bias is negligible in all models (no more than 30 mW m−2). We found that the atmospheric component (AM3) of the Geophysical Fluid Dynamics Laboratory (GFDL) general circulation model and Canadian Middle Atmosphere Model (CMAM) have the lowest TOA flux biases globally but are a result of cancellation of opposite biases due to different processes. Overall, the multi-model ensemble mean bias is −133±98  mW m−2, indicating that they are too atmospherically opaque due to trapping too much radiation in the atmosphere by overestimated tropical tropospheric O3 and H2O. Having too much O3 and H2O in the troposphere would have different impacts on the sensitivity of TOA flux to O3 and these competing effects add more uncertainties on the ozone radiative forcing. We find that the inter-model TOA outgoing longwave radiation (OLR) difference is well anti-correlated with their ozone band flux bias. This suggests that there is significant radiative compensation in the calculation of model outgoing longwave radiation

The Impact of Stratospheric Ozone Recovery on Tropopause Height Trends

The evolution of the tropopause in the past, present, and future climate is examined by analyzing a set of long-term integrations with stratosphere-resolving chemistry climate models (CCMs). These CCMs have high vertical resolution near the tropopause, a model top located in the mesosphere or above, and, most important, fully interactive stratospheric chemistry. Using such CCM integrations, it is found that the tropopause pressure (height) will continue to decrease (increase) in the future, but with a trend weaker than that in the recent past. The reduction in the future tropopause trend is shown to be directly associated with stratospheric ozone recovery. A significant ozone recovery occurs in the Southern Hemisphere lower stratosphere of the CCMs, and this leads to a relative warming there that reduces the tropopause trend in the twenty-first century. The future tropopause trends predicted by the CCMs are considerably smaller than those predicted by the Intergovernmental Panel on Climate Change Fourth Assessment Report (AR4) models, especially in the southern high latitudes. This difference persists even when the CCMs are compared with the subset of the AR4 model integrations for which stratospheric ozone recovery was prescribed. These results suggest that a realistic representation of the stratospheric processes might be important for a reliable estimate of tropopause trends. The implications of these finding for the Southern Hemisphere climate change are also discussed

Characteristics of tropospheric ozone depletion events in the Arctic spring: analysis of the ARCTAS, ARCPAC, and ARCIONS measurements and satellite BrO observations

Arctic ozone depletion events (ODEs) are caused by halogen catalyzed ozone loss. In situ chemistry, advection of ozone-poor air mass, and vertical mixing in the lower troposphere are important factors affecting ODEs. To better characterize the ODEs, we analyze the combined set of surface, ozonesonde, and aircraft in situ measurements of ozone and bromine compounds during the Arctic Research of the Composition of the Troposphere from Aircraft and Satellites (ARCTAS), the Aerosol, Radiation, and Cloud Processes affecting Arctic Climate (ARCPAC), and the Arctic Intensive Ozonesonde Network Study (ARCIONS) experiments (April 2008). Tropospheric BrO columns retrieved from satellite measurements and back trajectory calculations are also used to investigate the characteristics of observed ODEs. In situ observations from these field experiments are inadequate to validate tropospheric BrO columns derived from satellite measurements. In view of this difficulty, we construct an ensemble of tropospheric column BrO estimates from two satellite (OMI and GOME-2) measurements and with three independent methods of calculating stratospheric BrO columns. Furthermore, we select analysis methods that do not depend on the absolute magnitude of column BrO, such as time-lagged correlation analysis of ozone and tropospheric column BrO, to understand characteristics of ODEs. Time-lagged correlation analysis between in situ (surface and ozonesonde) measurements of ozone and satellite derived tropospheric BrO columns indicates that the ODEs are due to either local halogen-driven ozone loss or short-range (∼1 day) transport from nearby regions with ozone depletion. The effect of in situ ozone loss is also evident in the diurnal variation difference between low (10th and 25th percentiles) and higher percentiles of surface ozone concentrations at Alert, Canada. Aircraft observations indicate low-ozone air mass transported from adjacent high-BrO regions. Correlation analyses of ozone with potential temperature and time-lagged tropospheric BrO column show that the vertical extent of local ozone loss is surprisingly deep (1–2 km) at Resolute and Churchill, Canada. The unstable boundary layer during ODEs at Churchill could potentially provide a source of free-tropospheric BrO through convective transport and explain the significant negative correlation between free-tropospheric ozone and tropospheric BrO column at this site

The potential to narrow uncertainty in projections of stratospheric ozone over the 21st century

Future stratospheric ozone concentrations will be determined both by changes in the concentration of ozone depleting substances (ODSs) and by changes in stratospheric and tropospheric climate, including those caused by changes in anthropogenic greenhouse gases (GHGs). Since future economic development pathways and resultant emissions of GHGs are uncertain, anthropogenic climate change could be a significant source of uncertainty for future projections of stratospheric ozone. In this pilot study, using an "ensemble of opportunity" of chemistry-climate model (CCM) simulations, the contribution of scenario uncertainty from different plausible emissions pathways for ODSs and GHGs to future ozone projections is quantified relative to the contribution from model uncertainty and internal variability of the chemistry-climate system. For both the global, annual mean ozone concentration and for ozone in specific geographical regions, differences between CCMs are the dominant source of uncertainty for the first two-thirds of the 21st century, up-to and after the time when ozone concentrations return to 1980 values. In the last third of the 21st century, dependent upon the set of greenhouse gas scenarios used, scenario uncertainty can be the dominant contributor. This result suggests that investment in chemistry-climate modelling is likely to continue to refine projections of stratospheric ozone and estimates of the return of stratospheric ozone concentrations to pre-1980 levels

Climate change projections and stratosphere–troposphere interaction

Climate change is expected to increase winter rainfall and flooding in many extratropical regions as evaporation and precipitation rates increase, storms become more intense and storm tracks move polewards. Here, we show how changes in stratospheric circulation could play a significant role in future climate change in the extratropics through an additional shift in the tropospheric circulation. This shift in the circulation alters climate change in regional winter rainfall by an amount large enough to significantly alter regional climate change projections. The changes are consistent with changes in stratospheric winds inducing a change in the baroclinic eddy growth rate across the depth of the troposphere. A change in mean wind structure and an equatorward shift of the tropospheric storm tracks relative to models with poor stratospheric resolution allows coupling with surface climate. Using the Atlantic storm track as an example, we show how this can double the predicted increase in extreme winter rainfall over Western and Central Europe compared to other current climate projection

Stratosphere‐troposphere coupling and annular mode variability in chemistry‐climate models

The internal variability and coupling between the stratosphere and troposphere in CCMVal‐2 chemistry‐climate models are evaluated through analysis of the annular mode patterns of variability. Computation of the annular modes in long data sets with secular trends requires refinement of the standard definition of the annular mode, and a more robust procedure that allows for slowly varying trends is established and verified. The spatial and temporal structure of the models’ annular modes is then compared with that of reanalyses. As a whole, the models capture the key features of observed intraseasonal variability, including the sharp vertical gradients in structure between stratosphere and troposphere, the asymmetries in the seasonal cycle between the Northern and Southern hemispheres, and the coupling between the polar stratospheric vortices and tropospheric midlatitude jets. It is also found that the annular mode variability changes little in time throughout simulations of the 21st century. There are, however, both common biases and significant differences in performance in the models. In the troposphere, the annular mode in models is generally too persistent, particularly in the Southern Hemisphere summer, a bias similar to that found in CMIP3 coupled climate models. In the stratosphere, the periods of peak variance and coupling with the troposphere are delayed by about a month in both hemispheres. The relationship between increased variability of the stratosphere and increased persistence in the troposphere suggests that some tropospheric biases may be related to stratospheric biases and that a well‐simulated stratosphere can improve simulation of tropospheric intraseasonal variability

The effects of improving sleep on mental health (OASIS): a randomised controlled trial with mediation analysis

BACKGROUND: Sleep difficulties might be a contributory causal factor in the occurrence of mental health problems. If this is true, improving sleep should benefit psychological health. We aimed to determine whether treating insomnia leads to a reduction in paranoia and hallucinations. METHODS: We did this single-blind, randomised controlled trial (OASIS) at 26 UK universities. University students with insomnia were randomly assigned (1:1) with simple randomisation to receive digital cognitive behavioural therapy (CBT) for insomnia or usual care, and the research team were masked to the treatment. Online assessments took place at weeks 0, 3, 10 (end of therapy), and 22. The primary outcome measures were for insomnia, paranoia, and hallucinatory experiences. We did intention-to-treat analyses. The trial is registered with the ISRCTN registry, number ISRCTN61272251. FINDINGS: Between March 5, 2015, and Feb 17, 2016, we randomly assigned 3755 participants to receive digital CBT for insomnia (n=1891) or usual practice (n=1864). Compared with usual practice, the sleep intervention at 10 weeks reduced insomnia (adjusted difference 4·78, 95% CI 4·29 to 5·26, Cohen's d=1·11; p<0·0001), paranoia (-2·22, -2·98 to -1·45, Cohen's d=0·19; p<0·0001), and hallucinations (-1·58, -1·98 to -1·18, Cohen's d=0·24; p<0·0001). Insomnia was a mediator of change in paranoia and hallucinations. No adverse events were reported. INTERPRETATION: To our knowledge, this is the largest randomised controlled trial of a psychological intervention for a mental health problem. It provides strong evidence that insomnia is a causal factor in the occurrence of psychotic experiences and other mental health problems. Whether the results generalise beyond a student population requires testing. The treatment of disrupted sleep might require a higher priority in mental health provision. FUNDING: Wellcome Trust