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("prep" stands for "prepare" and those routines ensure all the data needed for the component is ready for next time it's its run method is called.)
Read the above diagram for atmosphere-ocean as follows: at the start, the coupler has atmosphere and ocean data from either the previous step or the initialization sequence. On the coupler tasks, the driver calculates atmosphere-ocean fluxes on the ocean grid (AtmOcn Prep). The driver then calls, on the coupler tasks, "Ocn Prep" where any additional data the ocean needs (such as ice-ocean fluxes from the sea-ice model or river runoff) are merged (using a simple weighted sum with area fractions) so that the ocean gets one combined heat, freshwater or momentum flux for each of its grid points.
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The driver will then call the atmosphere run method (on the atmosphere tasks). The atmosphere executes some number of time steps. While the atmosphere is running, the driver call calls the routine to transfer data from the ocean to the coupler (on the union of coupler and ocean tasks). The driver will then call the routine to send data from the atmosphere to the coupler (on the union of atmosphere and coupler tasks).
At this point, we are at the bottom of the run sequence and we return to the top where the coupler has the atmosphere and ocean data is it has received from the previous iteration.
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The driver contains code for time-averaging the data to be sent to a component if the coupler frequencies don't match. For example if NCPL_OCN is set to 3 hours while the NCPL_ATM is 1 hour, the coupler will accumulate the atmosphere ocean fluxes calculated every time the atmosphere talks to the coupler and send sends the ocean the average.
In the current implementation, the coupling period must be identical for the atmosphere, sea ice, and land components. The ocean coupling period can be the same or greater. The runoff coupling period should be between or the same as the land and ocean coupling period. All coupling periods must be multiple integers of the smallest coupling period and will evenly divide the NCPL_BASE_PERIOD. No component model can have a time-step longer then its coupling period.
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The atmosphere-ocean fluxes are unique in being calculated in the coupler. This was done because for a long time the ocean only talked to the coupler once a day but the atmosphere needed fluxes that changed with the changing lower-atmosphere-level properties. Also the fluxes are calculated on the high-resolution (ocean) grid. So in the coupler, SST was held fixed and new heat and momentum fluxes would be calculated as new atmosphere properties were sent to the coupler (and interpolated to the ocean grid). The fluxes are interpolated back to the atmosphere grid and sent to the atmosphere. Meanwhile, the fluxes (on the ocean grid) are summed and then averaged before sending to the ocean.
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Once data has been copied in to the cpl7 data types, the coupler can perform all necessary interpolation and data transfer to get the data to the components that need it. The sending component, in this case the atmosphere, needs to send the union of all requested data but doesn't have to know where it all it goes. Similarly, the coupler expects to receive good values for all this data but doesn't need to know if from a "real" model or from a "data model" that is reading it from files.
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