The Dictionary of the Climate Debate (DCD)

sub-grid parameterization
Definition: The estimating of the values of climate processes that take place at scales smaller than the climate model's resolution, i.e., that occur within grid cells.

For example:
(1) Cumulus clouds are much smaller than the grid size, thus a crude way to handle a partly cloudy day is to assume a uniform cover of partially transparent clouds over a whole grid cell.

(2) Features such as cities, lakes, forests, and agricultural lands may be smaller than the grid size, hence their different climatic effects must be parameterized, i.e. estimated.

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