In this article, we shall discuss the 20 most climatically diverse countries in the world. To skip our detailed analysis of the future of the global clean energy and sustainability industry in 2024, go directly and see 5 Most Climatically Diverse Countries in the World.
2023 saw the global renewable energy industry facing considerable headwinds in the aftermath of skyrocketing costs, project delays driven by supply chain disruptions, uncertainty in global trade policy, rising inflation and interest rates, and numerous interconnection delays. According to a report by Deloitte, some of these challenges are likely to seep into 2024 as well, exacerbating current headwinds. However, the report also highlights that growth is expected to accelerate at unprecedented levels, powered by strong demand and the numerous clean energy incentives put forth in the Inflation Reduction Act. Although skyrocketing demand could exacerbate supply chain turbulence and interconnection bottlenecks thereby further causing prices to rise, there are certain evolving trends which are likely to aid the industry in navigating and mitigating these headwinds to set the stage for faster growth in 2024 especially in most climatically diverse countries in the world. Most prominently, the marked increase in clean energy component manufacturing has the potential to streamline supply chain entanglements over time. Furthermore, with the industry directing a greater amount of focus to increasing cybersecurity and averseness to risk, the road to more effective profitability seems to be much more pronounced. Lastly, the IRA incentivizes renewable energy providers to increase investment in pursuing greater opportunities in low-income communities expanding the market for clean energy and increasing demand. According to McKinsey, renewable energy is set to make up a large proportion of the power mix as early as 2050, expected to make up for 85% of total energy generation. Some of the largest players in the clean energy sector are NextEra Energy Inc. (NYSE:NEE), General Electric Co. (NYSE:GE), and Plug Power Inc. (NASDAQ:PLUG). To read more on the clean energy sector, check out our coverage of Top 20 Renewable Energy Companies in the World.
Resisting Volatility: An Analysis
With an increasingly turbulent macroeconomic outlook even in some of the most climatically diverse countries in the world, all affected industries are struggling to adapt, with energy companies in particular facing a variety of macroeconomic and energy-specific disruptions. These tend to include a marked increase in commodity prices, rising pressure to curtail the carbon footprint, and numerous supply chain disruptions. It is a well established fact that energy companies which create and pursue innovative opportunities during times of crisis are more likely to increase profitability and keep operations afloat. However, this usually requires a cognitive shift from merely adjusting to volatility to identifying and capitalizing upon the many opportunities presented in climatically diverse countries in the world. This requires capturing larger, predominant trends and understanding additional risks. According to a recent report by McKinsey, the global transition to cleaner sources of energy presents enormous opportunities for energy companies in Europe to pivot their domestic renewable energy production.
However, the report also highlights that the estimated expenditure required to make this transition by 2050 is estimated to be around $5.3 trillion, particularly as it relates to upgrading and renovating power grids, installing baseload power with hydro pump storage plants, and installing smarter technology in homes and offices for heating and cooling. Companies like NextEra Energy Inc. (NYSE:NEE), General Electric Co. (NYSE:GE), and Plug Power Inc. (NASDAQ:PLUG) are gearing up to play defense and curate an effective risk management approach before resorting to an offensive business strategy. In this vein, these companies are creating transparency around risks by building appropriate heat maps which they can then use to break down risks and assess a prioritization mechanism. Additionally, heat maps shed light upon the entire trajectory of a specific action, highlighting how certain actions can lead to risks that were hitherto unrecognized.
Secondly, companies are increasing their overall reliance on quantitative modelling. Heat maps merely tend to provide an arbitrary picture of portfolio risk. Companies complement this by engaging in quantitative modelling which can showcase the entire distribution of risk and effectively curate a dynamic portrait. The quantification of risk is undoubtedly a complicated process but it is made possible via high-level outside-in analytics. The resultant models can aid in the overall understanding of executives and leaders in relation to their investment strategies. Once these quantified models are implemented, relevant scenarios can be applied to the portfolio, whilst considering their effect on company finances. Furthermore, expert predictions can go hand-in-hand with digital simulations to best imitate real-world complications that tend to arise in some of the most climatically diverse countries in the world. The likely impact of this kind of stress testing can outline the possibilities of disruption whilst purporting possible mitigation strategies. To read more on how energy companies can navigate the precarious macroeconomic challenges, check out our coverage of the 30 Countries with the Cleanest Air in the World.
Overcoming Talent Gaps: An Overview
According to a report by McKinsey, companies are struggling to find and retain competent employees, partly due to the Great Attrition. Since April 2022, more than 24 million workers in the US have been forced out their jobs, with more than forty percent globally claiming that they are likely to vacate their current position of employment by January 2024. Numerous companies across industries, particularly the renewable energy sector, find this an incredibly complex problem, especially since the clean energy segment requires a significant amount of technical expertise and experience especially in some of the more climatically diverse countries in the world. Furthermore, the pressure seems to be exacerbating as skyrocketing demand is causing a rapid growth in the clean energy industry, with McKinsey estimating the global installed capacity of solar and onshore and offshore wind projects will have tripled by 2030. Hence, as demand for cleaner energy reaches an all-time high, there is also an internal demand of qualified development and construction employees, operations workers, and maintenance employees.
To mitigate and fill current talent gaps in order to capitalize on the growing industry, top players like NextEra Energy Inc. (NYSE:NEE), General Electric Co. (NYSE:GE), and Plug Power Inc. (NASDAQ:PLUG) must invest in a strong brand image to attract the top talent. It is within the best interests of these companies to control market perception. Global players tend to underestimate the value of regional branding in their home countries, which is an essential precondition to attracting the best employees. Furthermore, companies will need to create and propagate clear career path development, especially for key employment positions. A lack of career development opportunity is a major cause of an employee outflow, with employees who can visualize a future within the company much more likely to stay and compete. The oil and gas industry has been facilitating exploration and production development in employees for decades and it is time for the renewable energy sector to follow suit. Clean energy companies also need to divert greater investments in structured training to attract and retain key blue-collar operatives within the company. Employers need to expand beyond wages and utilize relevant training programs which focus on clear, long-term career progression especially for roles which are temporary.
Photo by onur ozkardes on Unsplash
Our Methodology
To create our list of the 20 most climatically diverse countries in the world, we used the Köppen climate classification system to identify the major climate zones across the world. Using the climate classification system, we identified the most climatically diverse regions in the world and created a list of 61 prospective countries. Then we accumulated climate data for each country using different reliable sources like global meteorological organizations (1, 2), climate research organizations (1, 2), and local meteorological departments. We considered and assigned a score to three primary variables to measure climatic diversity namely difference in temperature ranges (15 points), diversity of precipitation levels (10 points), and diversity in wind patterns (5 points). We then proceeded to award each country a cumulative score according to the aforementioned criteria and selected 20 countries which scored the highest points. Subsequently, we ranked each entry based on the total points scored, from lowest to highest. Where there was a tie, we broke it based on the difference in temperature ranges.
Climatically diverse countries are usually geographically diverse as well. To read about geographical diversity, check out our article on 20 Most Geographically Diverse Countries in the World.
Most Climatically Diverse Countries in the World
20. Peru
Total Score: 8
As the Andean mountain range runs north to south, it divides Peru into three main climatic regions. The regions include the Coast, the Andean Highlands, and the eastern lowlands and the Amazon rainforest.
19. Philippines
Total Score: 8
The Philippines experiences high temperatures and frequent rainfall. The country witnesses five different types of climates making it one of the most climatically diverse countries in the world.
Total Score: 10
Colombia is one of the most climatically diverse countries in the world as it experiences different kinds of climates in different regions, namely tropical rainforests, savannas, steppes, deserts, and mountains.
17. Madagascar
Total Score: 11
Madagascar is known to have a diverse and unpredictable climate. Its ecosystems include tropical rainforest, dry desert, savanna, and dry deciduous forest making it one of the most climatically diverse countries in the world. All the ecosystems experience different climates and weather.
16. South Africa
Total Score: 12
South Africa experiences both subtropical and temperate climate. As the country is surrounded by the ocean along the east and west coast, different parts of the country witness different types of climates, like subtropical in the northeast and Mediterranean climate in the southeast.
15. Argentina
Total Score: 15
Argentina is one of the most climatically diverse countries in the world and has a total of eleven climate classifications. Some of these classifications include Humid Subtropical, Moderate Oceanic, and Warm Desert.
14. Canada
Total Score: 15
Canada experiences immense climatic diversity as its geographic climatic regions are divided into twelve categories. Some of the categories include the Boreal forests, the Arctic regions, and the West Coast.
13. Germany
Total Score: 15
Germany has a temperate climatic zone and belongs to the mid-latitude climate zone. However, Germany experiences hot summers and cold winters. The country also witnesses spring and fall, making it one of the most climatically diverse countries in the world.
12. Portugal
Total Score: 16
In Portugal, the locals experience different kinds of climate. The climate is generally temperate and the winters are rainy; however, depending on the regions, the summers in Portugal are either too hot or warm.
11. Mexico
Total Score: 18
Due to its variable topography and geographic location, Mexico experiences a diverse climate in different areas. The weather in the central upland is generally higher than the temperature in the coastal lowlands of Mexico.
10. Spain
Total Score: 20
Spain is one of the most climatically diverse countries in the world, especially in Europe. The country experiences hot summers and cold winters. Along the coast, Spain experiences cloudier summers and cooler winters.
9. France
Total Score: 21
Towards the north, France witnesses cold temperatures, with snow in mountainous areas; while in the south, the country experiences a Mediterranean climate. During the summers the temperatures are hot, while during the winters, the temperatures are mild.
8. Costa Rica
Total Score: 23
Costa Rica is an extremely diverse country, in terms of its climate as it experiences approximately twelve different climatic zones in a year. The weather varies from being hot and humid to cold.
7. Haiti
Total Score: 23
Haiti witnesses extreme weather throughout the year. The country faces natural disasters, like tropical storms and hurricanes, frequently because of its location. Haiti is climatically diverse as the weather varies from hot to humid to tropical.
6. India
Total Score: 24
Even though India does not experience arctic or temperate climate at a great extent, the country witnesses various sub-climates since it is home to multiple subtropical deserts, salt lakes, and tropical islands. India is number 6 on our list of the 20 most climatically diverse countries in the world.
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Disclosure: None. 20 Most Climatically Diverse Countries in the World is originally published on Insider Monkey.