We present the sensitivity of the simulated climate near steep topographical regions when the numerical method for atmospheric transport in the Community Climate System Model (CCSM3) is changed from spectral to a finite volume (FV) transport. Our analysis of the circulation and precipitation shows significant local improvement in three aspects: 1) The Gibbs oscillations present in the cloudiness and shortwave radiative forcing fields in the spectral simulation are absent in the FV simulation. 2) The along-shore component of wind stress in the western coastal regions of North and South America increases in the FV simulation. This tends to reduce the persistent biases in sea surface temperature through enhanced oceanic upwelling. 3) The FV simulation shows improvement in the wet-dry contrast of orographically forced precipitation. These local improvements have impact on continental and larger scales and are critical to the confident use of information from climate predictions in adaptation to climate change.