The heat budget has been computed locally over the entire globe for ea
ch month of 1988 using compatible top-of-the-atmosphere radiation from
the Earth Radiation Budget Experiment combined with European Centre f
or Medium Range Weather Forecasts atmospheric data. The effective heat
sources and sinks (diabatic heating) and effective moisture sources a
nd sinks for the atmosphere are computed and combined to produce overa
ll estimates of the atmospheric energy divergence and the net flux thr
ough the Earth's surface. On an annual mean basis, this is directly re
lated to the divergence of the ocean heat transport, and new computati
ons of the ocean heat transport are made for the ocean basins. Results
are presented for January and July, and the annual mean for 1988, alo
ng with a comprehensive discussion of errors. While the current result
s are believed to be the best available at present, there are substant
ial shortcomings remaining in the estimates of the atmospheric heat an
d moisture budgets. The issues, which are also present in all previous
studies, arise from the diurnal cycle, problems with atmospheric dive
rgence, vertical resolution, spurious mass imbalances, initialized ver
sus uninitialized atmospheric analyses, and postprocessing to produce
the atmospheric archive on pressure surfaces. Over land, additional pr
oblems arise from the complex surface topography, so that computed sur
face fluxes are more reliable over the oceans. The use of zonal means
to compute ocean transports is shown to produce misleading results bec
ause a considerable part of the implied ocean transports is through th
e land. The need to compute the heat budget locally is demonstrated an
d results indicate lower ocean transports than in previous residual ca
lculations which are therefore more compatible with direct ocean estim
ates. A Poisson equation is solved with appropriate boundary condition
s of zero normal heat flux through the continental boundaries to obtai
n the ocean heat transport. Because of the poor observational data bas
e, adjustments to the surface fluxes are necessary over the southern o
ceans. Error bars are estimated based on the large-scale spurious resi
duals over land of 30 W m-2 over 1000 km scales (10(12) m2). In the At
lantic Ocean, a northward transport emerges at all latitudes with peak
values of 1.1 +/- 0.2 PW (1 standard error) at 20 to 30-degrees-N. Co
mparable values are achieved in the Pacific at 20-degrees-N, so that t
he total is 2.1 +/- 0.3 PW. The peak southward transport is at 15 to 2
0-degrees-S of 1.9 +/- 0.3 PW made up of strong components from both t
he Pacific and Indian Oceans and with a heat flux from the Pacific int
o the Indian Ocean in the Indonesian throughflow. The pattern of polew
ard heat fluxes is suggestive of a strong role for Ekman transports in
the tropical regions.