Why trading water futures could be in our future

CNBC ^ | 07/02/2014 | Patti Domm

[SeekAndFind]

Water is the one natural resource required to sustain all life on the planet, making it already the most important commodity on Earth.

Although it has been fought over, sold, diverted, dammed, claimed by governments and overseen by authorities, Wall Street has never really gotten its hands in it the way it has with, say, oil.

Looking ahead into the next quarter century, clean drinkable water is expected to become more scarce as the human population grows and climate change shifts the shorelines and weather patterns.

So the question is, Will this most precious commodity become a traded resource that will be bartered for, and traded on a futures exchange, much like oil, corn or gold?

"It's intuitively appealing to talk about water as a traded asset. If you look at projections over the next 25 years, you'll see that global water supply and demand imbalances are on track to get worse," said Deane Dray, a Citigroup analyst who heads up global water-sector research. "The majority of the world population is living in water-scarce and water-stressed regions of the world. "

But Dray and other experts say trading water will be difficult, as water supply is ultimately a local issue all over the world.

"I don't see how you would do it. Water's regulated locally. It's regulated in every state. You can't put a pipe in a waterway and start selling it somewhere else," said Robert Kennedy Jr., president of Waterkeeper Alliance, which promotes watershed protection globally. "The waterways are owned by the people of the state." History is full of examples where water diversion led to wars or environmental tragedies. The former Soviet Union diverted rivers for crops in the 1960s, ultimately drying out the Aral Sea in Central Asia, where fishing boats are now stranded on dry land.

[GeronL]

I can imagine all the different brands of bottled water getting their own online stock exchange. Ozarka is down 3 cents today, Dasani is up a penny....

[DannyTN]

if he was behind the Chicago Climate Exchange, that means he’s probably got plenty of rat’s and rinos lined up trying to get rich off another scheme.

[DannyTN]

if he was behind the Chicago Climate Exchange, that means he’s probably got plenty of rat’s and rinos lined up trying to get rich off another scheme.

[Boogieman]

I’ll consider investing in it when it stops falling from the sky.

[Mad Dawgg]

"I’ll consider investing in it when it stops falling from the sky."

You should know the EPA/gub'ments have made it illegal to catch and store rain water in several of the western states already.

So don't be surprised if it happens where you live also.

[Boogieman]

Meh, it would just be one more stupid law for me to ignore.

[tbw2]

This could help fuel constructions of desalinization projects.

[G Larry]

Because there are about a dozen Federal agencies who could shut down your Future’s water source, I’d stay away.