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In some ways, water is a possible candidate on the commodity market. First, it satisfies the fungibility conditions. Water pumped from a lake, stream or torrent is almost the same as that from an iceberg, an aquifer or that collected in a barrel of rainwater. Soon, it will also satisfy the second condition of commodification: it becomes more and more… liquid, convertible into cash.
Of course, water is global. Watershed management is a hot topic, both for the Volta and for the Senegal Rivers. From a monetary point of view, whether the river is the Spanish Guadalquivir, the French Rhône, the Niger or the California’s Sacramento makes no difference.
Financial forecasters realize that, like traditionally traded raw materials such as precious metals, the exploitable water of the future will be so scarce that it will have to be extracted as an ore, treated, conditioned, bottled and, more importantly, moved and transported around the world. They know very well that demand will not dry up. The main idea behind a global water futures market lies behind this concept.
In the history of water and currency, the Rubicon was crossed in the year of grace 1996. Water irrigation of the Westlands, in California, is used to produce a billion dollars of food per year. With two thousand square meters, it is the largest irrigated agricultural district in the United States. In 1996, the district established an email system that allows farmers to sell or buy their rights to this water from their computers. Negotiating water rights from your laptop is a reality. Like raw materials that could in the past be sold or bought on the Chicago or Kansas City stock exchanges and which are currently commonly manipulated by doctors of mathematics for investment funds in Connecticut, If water were to become a commodity, it would join Brent crude, aviation fuel and soybean oil, and could be traded anywhere, anytime and by anyone.
Making money from the tap means that freshwater can be priced no matter where it is traded - a global price that can be arbitrated across continents. Those who live in Mumbai or downtown Manhattan and who see an increase in the value of water in the global economy will speculate on this undervalued "asset". True global trade within the framework of a water future markets will nevertheless have to wait until the financiers agree on the universal adoption of a measure of water stress. By then, the water future markets will manifest as sporadic phenomena reflecting local concerns.
Frederick KAUFMAN - A freelance journalist, he writes about the cultural eating habits of Americans and other subjects for Harper's Magazine, The New Yorker, Goumet Gastronomica. His texts can be read in more than a hundred magazines. He is the author of four books. He teaches at New York University and the CUNY School of Journalism
Flashmag January 2020 www.flashmag.net