That’s terrifying news! Water begins trading on Wall Street in the Futures Market for fear of shortages!
What is water trading?
The market allows farmers, hedge funds, and municipalities to hedge bets on the future price of water and water availability in the American West. The new trading scheme was announced in September, prompted by the region’s worsening heat, drought, and wildfires.
Water trading pros and cons
Proponents argue the new market will clear up some of the uncertainty around water prices for farmers and municipalities, helping them budget for the resource.
But some experts say treating water as a tradable commodity puts a basic human right into the hands of financial institutions and investors.
Wall Street’s water trading
The country’s first water market launched on the Chicago Mercantile Exchange this week with $1.1 billion in contracts tied to water prices in California.
“Droughts, population growth, and pollution are likely to make water scarcity issues and pricing a hot topic for years to come. We are definitely going to watch how this new water futures contract develops,” RBC Capital Markets managing director and analyst Deane Dray told Bloomberg.
“What this represents is a cynical attempt at setting up what’s almost like a betting casino so some people can make money from others suffering. My first reaction when I saw this was horror, but we’ve also seen this coming for quite some time,” said Basav Sen, climate justice project director at the Institute for Policy Studies.