31–40 of 50 posts
Oh goody! Nothing like the financialization of life-necessities to warm the cockles of the heart of big capital.
The previous situation where almond farmers got unlimited water for free and some cities couldn't get enough water at any price was worse.
I also wonder how a futures contract with instant liquidity interplays with standard water bills, which as far as I know are billed at rates that get adjusted yearly at most (at least here in LA).
I wouldn't gave guessed they would be that close, but it bodes very well for inexpensive energy / improvements in desalination technology being a source of water.
[1] https://www.eco-business.com/news/hyflux-to-produce-worlds-c...
I'm afraid that the dispersal of responsibility among many different parties who benefit under archaic "riparian rights" laws that are totally outdated and unable to be changed because no one cares enough to build the political momentum means that this issue will fester like climate change. And even more than climate, the emotions driving the issue (such as in California) are tangible and exploitable to favor incumbe…
And we're about twenty years into a drought.
This is a unique commodity in that it literally falls from the sky. I don’t believe we have any tradable commodities that can be obtained, rather easily, for free. Yes, I know we’re talking about massive amounts of water and aquifers, but I can picture Wall Street banks setting up huge rain catchers and desalination plants to try and profit from this market.
Potable water and desalination is a very expensive problem.
Earlier quoted context omitted.
I do not understand your point as these contracts are settled in cash. Do you care to elaborate?
I share the same concerns. Market economics did not prevent e.g. Enron from scalping millions of dollars out of CA energy markets while rolling blackouts resulted in powerless hospitals. Speculation - not actual supply or demand - in oil markets drove the price of gasoline from $1 to $4 a gallon (and now back to $2). Everyone else paid for the inefficient market finding a false equilibrium pumped up by perception of…
That's really not true in general. Market theory has been crucial in creating more sustainable resource usage in the US northeast fisheries, and the highly successful SOX and NOX emissions markets (acid rain really isn't an existential threat any longer). The US seems to be incapable of forming a sane CO2 market because of the rights intransigence and capture by fossil fuels, and the lefts reluctance to embrace a market solution/desire to overregulate (combining a methane/hfc greenhouse market with a CO2 greenhouse market is going to cause major arbitrage problems that could lead to greenhouse worsening)
I find it interesting that the cost of water is pretty close to the cost of Desalination. 1 acre foot = 1233 m^3. Hyflux has contracts [1] in Singapore (on a multi-year committed contract at volume) back in 2011 for Desalinated water at $0.45/m^3 or $554/acre foot, which is roughly where the spot market right now is for water. I wouldn't gave guessed they would be that close, but it bodes very well for inexpensive en…
Earlier quoted context omitted.
Water has been financialized for years in the western US. Developers buy and sell water rights from farmers, farmers own farms where they don't grow crops because the water is going to condos. Water rights are bought and sold and traded all the time.
Water rights have been finacialized for thousands of years. Qanats, which are underground sort of canals ( https://en.wikipedia.org/wiki/Qanat ) were built in Persia to distribute water to agriculture and incentivized by government "It was an Achaemenid ruling that in case someone succeeded in constructing a qanat and bringing groundwater to the surface in order to cultivate land, or in renovating an abandoned qanat,…
Feels like someone has been reading the water knife