Water trading on Wall Street means world’s most vital resource as a basic human right under threat, UN warns
Why should we worry? Because treating water as a tradable commodity puts a basic human right into the hands of investors.
Wall Street has begun trading water as a commodity, like gold or oil.
The world’s first water market launched on the Chicago Mercantile Exchange this week with $1.1 billion in contracts tied to water prices in California, Bloomberg News reported.
In reaction, Pedro Arrojo-Agudo, the UN’s Special Rapporteur on the human rights to safe drinking water and sanitation, said trading water futures like oil or gold is expected to leave the market vulnerable to a speculative bubble.
“The news that water is to be traded on Wall Street futures market shows that the value of water, as a basic human right, is now under threat. It is closely tied to all of our lives and livelihoods, and is an essential component to public health.”
“Climate change, 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 develop,” said RBC Capital Markets managing director and analyst Deane Dray, as quoted by Bloomberg.
“Water is indeed a vital resource for the economy – both large and small-scale players – but the value of water is more than that. Water has a set of vital values for our society that the market logic does not recognize and therefore, cannot manage adequately, let alone in a financial space so prone to speculation,” said Arrojo-Agudo.