The Accelerating Frequency of Extreme Weather
The world is already witnessing the effects of climate change.
A few months ago, the western U.S. experienced one of the worst droughts it’s seen in the last 20 years. At the same time, southern Europe roasted in an extreme heatwave, with temperatures reaching 45°C in some parts.
But things are only expected to get worse in the near future. Here’s a look at how much extreme climate events have changed over the last 200 years, and what’s to come if global temperatures keep rising.
A Century of Warming
The global surface temperature has increased by about 1°C since the 1850s. And according to the IPCC, this warming has been indisputably caused by human influence.
As the global temperatures have risen, the frequency of extreme weather events have increased along with it. Heatwaves, droughts and extreme rainstorms used to happen once in a decade on average, but now:
- Heatwaves are 2.8x more frequent
- Droughts are 1.7x more frequent
- Extreme rainstorms are 1.3x more frequent
By 2030, the global surface temperature is expected to rise 1.5°C above the Earth’s baseline temperature, which means that:
- Heatwaves would be 4.1x more frequent
- Droughts would be 2x more frequent
- Extreme rainstorms would be 1.5x more frequent
The Ripple Effects of Extreme Weather
Extreme weather events have far-reaching impacts on communities, especially when they cause critical system failures.
Mass infrastructure breakdowns during Hurricane Ida this year caused widespread power outages in the state of Louisiana that lasted for several days. In 2020, wildfires in Syria devastated hundreds of villages and injured dozens of civilians with skin burns and breathing complications.
As extreme weather events continue to increase in frequency, and communities become increasingly more at risk, sound infrastructure is becoming more important than ever.
How People Around the World Feel About Their Economic Prospects
In many of the world’s largest economies, including the U.S., Germany, and China, optimism around economic prospects sits at an all-time low.
How Countries Feel About Their Economic Prospects
Each year, the Edelman Trust Barometer report helps gauge the level of trust people place in various systems of power.
The report is also a useful tool to gauge the general mood in countries around the world—and when it comes to how people in developed economies feel about the near future, there’s a very clear answer: pessimistic. In fact, optimism about respondents’ economic prospects fell in the majority of countries surveyed.
Here’s a full look how many respondents in 28 countries feel they and their families will be doing better over the next five years. Or, put more simply, what percentage of people are optimistic about their economic circumstances?
|Country||% who are optimistic||All-time low?||Change from 2021 (p.p.)|
|🇰🇷 South Korea||39%||+6|
|🇿🇦 South Africa||66%||-2|
|🇸🇦 Saudi Arabia||73%||0|
Interestingly, nine countries (those with checkmarks above) are polling at all-time lows for economic optimism in survey history.
Whose Glass is Half Empty?
Japanese respondents were the most pessimistic, with only 15% seeing positive economic prospects in the near term. Only 18% of French respondents were economically optimistic.
While most developed economies were slightly more optimistic than Japan and France, all are still well below the global average.
As tensions between China and the U.S. continue to heat up in 2022, there is one thing that can unite citizens in the two countries—a general feeling that economic prospects are souring. As the U.S. heads into midterm elections and China’s 20th National Party Congress takes place, leaders in both countries will surely have the economy on their minds.
Whose Glass is Half Full?
Of course, the mood isn’t all doom and gloom everywhere. The United Arab Emirates saw a 6 percentage point (p.p.) jump in their population’s economic prospects.
Indonesia saw an 11 p.p. increase, and in big developing economies like Brazil and India, the general level of optimism is still quite high.
In some ways, it’s no surprise that people in developing economies are more optimistic about their economic prospects. Living standards are generally rising in many of these countries, and more opportunities open up as the economy grows. Even in the most pessimistic African country surveyed, South Africa, the majority of people still see improving circumstances in their near future. In Kenya and Nigeria, an overwhelming majority are optimistic.
One major prediction that experts agreed on for the year ahead is that economic outcomes will begin to diverge between countries with differing levels of vaccine access.
While this doesn’t seem to have affected attitudes towards economic optimism yet, it remains to be seen how this will play out as the year progresses.
Blockchain Applications: Tokenization of Real Assets
Tokenization is a future application of blockchain technology, and it could make investing in physical assets much easier. (Sponsored Content)
Blockchain Applications: Tokenization of Real Assets
Did you know that blockchain has the potential to transform the way we invest in physical assets?
Tokenization is a solution that divides the ownership of an asset (such as a building) into digital tokens. These tokens act as “shares”, and are similar to non-fungible tokens (NFTs). The difference here, however, is that the tokens are fungible and they are actually tied to the value of the asset.
In this graphic sponsored by Global X ETFs, we visualize how tokenization could be used in real estate.
Tokenization in Real Estate
Blockchain has strong potential in real estate investing because it mitigates many of the asset class’ hurdles. Here’s a brief round-up of its theoretical advantages:
Buying and selling real estate is normally a tedious process. If a property were to be tokenized, it would essentially cut out the middleman and allow buyers and sellers to transfer ownership directly.
These transfers would be as easy as buying and selling cryptocurrency.
Removing barriers to entry
Because properties are expensive, real estate investing is typically limited to institutional investors with large amounts of capital. Individuals can gain exposure through a real estate investment trust (REIT), but these vehicles can carry high minimums and fees.
Tokenization could enable individuals to buy and sell real estate in small denominations (even fractions of a token) and without traditional fees.
Transparency and security
Blockchains are decentralized, digital ledgers known for their security. Tampering with a blockchain’s data is incredibly difficult because the ledger is shared and verified by all of its users.
This provides investors with full transparency into the past transactions of a property, as well as an undeniable proof of ownership.
If tokenization proves to be effective, it could be extended to a whole range of other physical assets—most of which have their own unique barriers. Consider the following table, which lists the 12-month and 10-year return of various luxury goods.
|Category||12-month return||10-year return|
Source: Knight Frank (Dec 2020)
Rare luxury goods have historically been sold through live auctions, where the highest bidder is awarded ownership. Thanks to blockchain technology, this could change in the future. In fact, Sotheby’s (a 277-year-old auction house) recently began to accept cryptocurrency as a payment option in its auctions.
In short, tokenization has the potential to greatly reduce the barriers around alternative and physical assets. For investors, this means a much wider set of opportunities to pursue.
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