If you’ve ever played with dominos, you’re familiar with their cascading effects. Gently nudge one piece, and the force will ripple throughout the rest.
This process of cause and effect works much the same way in society and business: as global forces take hold, their effects are deeply intertwined with the financial markets.
The Climate Megatrend
Today’s infographic comes from BlackRock, and it explains how one such megatrend, climate change and resource scarcity, will be a long-term opportunity for investors.
Earth in the Hot Seat
In 2018, global CO2 emissions rose 1.7% to the highest level since 2013. These rising emissions have intensified the effects of climate change, with 2015-2018 being the four hottest years ever recorded. Society and the economy are starting to feel its negative consequences:
- Extreme weather events have become more frequent. In particular, floods and other hydrological events have quadrupled since 1980.
- In hotter, wetter conditions, infectious diseases spread more easily—between 2004-2017, total tick-borne illnesses increased by 163%.
- The global insured losses from natural catastrophes was $79 billion in 2018.
- Extreme weather effects, and the health impact of burning fossil fuels, cost the U.S. economy at least $240 billion in 2018.
It’s clear that climate change is having an immediate, serious impact on the world.
Many see climate change as a long-dated future risk, however, our research findings show that compared to the 1980’s, there are measurable GDP impacts in the market today
-Brian Deese, Global Head of Sustainable Investing at BlackRock
In addition to these issues, climate change is contributing to another problem: it’s becoming harder to feed the global population.
Over 7 Billion Mouths to Feed
Climate change significantly threatens global food security. As glaciers melt, the world’s freshwater supply—including what’s available for food production—melts with it. This is a significant problem, considering that between 2,000-5,000 liters of fresh water are needed to produce one person’s daily food intake.
As an added hurdle to food production, supply and demand are pulling in opposite directions.
The share of total employment in agriculture has dropped significantly over time. Even worse, among the food that is able to be harvested, roughly 30% is lost or wasted globally.
On top of limited resources, the world will have to contend with forces driving up food demand.
- Population growth: By 2050, the global population will grow by about two billion.
- More calorie-rich diets: As emerging economies grow their wealth, their populations seek richer foods like meat and dairy products.
How can society combat these pressing issues?
A Greener, More Plentiful Future
As society works to slow climate change and produce more with less, a myriad of investment opportunities will emerge.
- Renewable energies are becoming increasingly competitive.
- Electric & fuel cell vehicles are growing in market share.
- Products made from recycled materials are appealing to environmentally-conscious consumers.
- Agricultural machinery counters the declining workforce and increases productivity.
- Precision agriculture leverages real-time environmental data to help farmers make decisions.
Climate change and resource scarcity will be a driving force behind the actions of consumers, companies, and governments for years to come.
By staying attuned to this megatrend, investors will be able to spot long-term opportunities.
The World’s Top Coffee Producing Countries
Coffee is the third most consumed beverage globally. Here we visualize the countries that have the highest coffee production in the world.
The World’s Top Coffee Producing Countries
In many cities around the world, there’s a café on every corner, so it comes as no surprise that coffee is one of the globes’ top commodities. As the third most consumed beverage globally, after water and tea, coffee beans are in high demand almost everywhere.
The top producing nations each produce billions of kilograms of coffee beans that find their way into the hands of eager consumers. According to the International Coffee Organization, a total of 169.6 million 60-kilogram bags of coffee were produced worldwide in 2020.
So, why does the world universally love coffee so much?
For The Love of Coffee
As most coffee lovers would tell you, drinking coffee is a complex and nuanced experience—there’s the rich aroma, the comforting warmth, and the loveliness of the ritual of sitting down with a fresh cup.
With the variety of ways it can be served and the jolt of caffeine it provides us, it’s not hard to see why the world loves its coffee. In fact, we love the beverage so much that humans have conditioned themselves to associate the bitter taste of coffee with a bout of energy and positive reinforcement.
So, where does the journey of each cup of joe originate? Let’s get to know the world’s top coffee producing countries.
The World’s Coffee Production Leaders
At the end of 2020, the top 10 biggest coffee-producing nations held 87% of the commodity’s market share.
Here is a list of the top 20 largest coffee-producing nations in the world:
|Rank||Country||Production in 2020 |
(Million 60-kg Bags)
|Total Market Share|
|13||🇨🇮 Côte d'Ivoire||1.8||1.1%|
|14||🇨🇷 Costa Rica||1.5||0.9%|
|17||🇵🇬 Papua New Guinea||0.7||0.4%|
|19||🇸🇻 El Salvador||0.6||0.4%|
While some of the world’s top coffee-producing nations are well known, others may come as a surprise. More than 70 countries produce coffee, but the majority of global output comes from just the top five producers: Brazil, Vietnam, Colombia, Indonesia, and Ethiopia.
Meet the Top Coffee Producing Countries
Brazil is a true powerhouse of coffee production. The country single-highhandedly produces nearly 40% of the world’s coffee supply.
Many areas in Brazil have a climate perfectly conducive to coffee farming. Coffee plantations cover about 27,000 square kilometers of Brazil, with the majority located in Minas Gerais, São Paulo, and Parana.
Brazil distinguishes itself from most other coffee-producing nations by drying the coffee cherries in the sun (unwashed coffee) rather than washing them.
The country is so influential to coffee production that the 60-kilogram burlap bags historically used to export beans from Brazil are still the worldwide standard for measuring production and trade.
Vietnam found a niche in the international market by focusing primarily on the less-expensive Robusta bean. Robusta beans can have up to twice as much caffeine as Arabica beans, giving the coffee a more bitter taste.
Though coffee has been grown in the region for well over a century, production skyrocketed through the 1990s after Vietnam’s communist government introduced economic reforms (known as Đổi Mới).
Today, Vietnam accounts for more than 40% of the world’s Robusta bean production.
Coffee cultivation in Vietnam is also extremely productive. The country’s coffee yields are considerably higher than other top coffee-producing countries.
A popular advertising campaign featuring a fictional coffee farmer named Juan Valdez helped brand Colombia as one of the most famous coffee-producing nations. A coveted drink of choice, Colombian coffee is prized for its aromatic, mild, and fruity flavors.
Some of the rarest coffees in the Western world originate in Indonesia, including Kopi Luwak—a type of bean that has been eaten and defecated by the Asian palm civet. Coffee made from these coffee beans might cost you anywhere between $35 to $100 per cup.
Known for its full-flavored, down-to-earth, and full-bodied coffee beans, Ethiopia is the country that gave us the Arabica coffee plant. Today this type of coffee is considered to be the most widely sold in cafes and restaurants across the world.
All of these top producing countries are found in the so-called “Bean Belt”, which is located between the Tropic of Cancer and the Tropic of Capricorn.
The Future of Coffee Production
With global temperatures on the rise, good coffee may become increasingly challenging to grow. To future-proof good and continued growth of coffee beans, finding newer and hybrid blends of coffee beans is essential.
Several studies and research missions have found wild species of coffee growing off the coast of Côte d’Ivoire and in certain regions of Sierra Leone, which could be the answer to our coffee production problems. Coffee from these coffee plants tasted similar to the famous Arabica bean and also grew at higher temperatures.
Though the future of coffee production around the world is somewhat uncertain, our collective love of the morning cup of coffee will drive innovative solutions, even in the face of changing climate patterns.
Animated Map: U.S. Droughts Over the Last 20 Years
The Western U.S. is no stranger to droughts. But this year’s is one of the worst yet. Here’s a historical look at U.S. droughts since 1999.
Animated Map: U.S. Droughts Over the Last 20 Years
The Western U.S. is experiencing one of the worst recorded droughts in the last 20 years.
Temperatures from California to the Dakotas are currently hovering around 9-12°F above average—but how bad is the situation compared to past years?
This animated map by reddit user /NothingAbnormalHere provides a historical look at droughts in the U.S. since 1999, using data and graphics from the U.S. Drought Monitor (USDM).
What is the U.S. Drought Monitor?
Over the last two decades, the USDM has been tracking, measuring, and comparing droughts across America.
While droughts can be difficult to classify and standardize, there are various factors that can be used to gauge when a region is experiencing drought. These include measurements of snowpack levels, soil moisture, and recent precipitation.
To track these conditions (and make sense of them), the USDM synthesizes data from a plethora of meteorological sources, including the Palmer Drought Severity Index and the Standardized Precipitation Index.
From there, conditions are broken down into categories, ranging from D0 (abnormally dry) to D4 (Exceptional Drought). A map is released each week that shows which states are experiencing drought, and to what degree.
Where Are The Most Drought-Prone Areas?
According to a map created by climatologist Becky Bolinger (which is published on Drought.gov), Arizona and Nevada are the most historically drought-prone states—the two have experienced drought more than 50% of the time tracked by the USDM.
California is high on the list as well, with the state experiencing drought at least 40% of the time.
As the historical data shows, the West is no stranger to droughts. However, this year’s drought has become particularly worrisome because of its intensity and breadth.
Right now, more than a quarter of the West is experiencing a D4 level drought—a new record. To help put things into perspective, here’s a look at how much overall land area in the West has been in drought, since 2000:
When a region is experiencing a D4 drought, possible impacts include:
- Water Scarcity
Lower reservoirs, combined with decreased snowpack lead to water shortages.
- Crop losses
Water shortages mean less water for fields, which can lead to acres of fallow (unused) farmland.
Dry conditions and lack of moisture increase the risk of wildfires.
Is This the New Norm?
This record-breaking drought is wreaking havoc across the West. In California, reservoirs have about half as much water as they usually do, and crop failures are happening across Colorado.
The worst part? Some experts believe that this could be the new normal if human-driven climate change continues to increase average temperatures across the globe.
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