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Insulation: definition.

Insulation cuts down on heat energy transfer. In an oceanographic context, it cuts down on the heat transer from the oceans to the atmosphere.

Who cares? Ice is a great insulator. A lot of what causes climate and weather involves the exchange of heat and fresh water between the ocean and atmosphere. If the ice cover is high, very little heat escapes from the warm ocean to the cold polar atmosphere in winter. But the heat loss through open water is so high, maybe 10-100 times more than through ice, that even a small fraction of open water has a big effect on area-averaged heat loss. Typical heat loss values are ~10 W/m2 through thick sea ice, and ~1000 W/m2 in winter through open water (depending on wind speed, air temperature, etc.)