Interesting that CME is now supporting trading of California Water Index futures.
Interesting to see different takes on what this means to the world. Some folks have pointed out the potential impact on scarcity in water or traded water would create a potential scenario that implies worldwide risk to a basic resource (ie. rising price of the index means that people can’t afford water …). However another take is that this is purely a method of market transparency that reveals the aggregated rates. Market conditions could then be addressed through competition, regulation, or through technology/innovation.
I was also interested in the measurement of NQH20 being valued in US dollars per acre foot. (43,560 square feet, filled to a depth of one foot, equivalent to 325,851 gallons). Apparently, this is a standardized measurement format in the United States in relation to large-scale water resources. Water reservoir capacities are measured in TAF (thousands of acre-feet). Seems like in other locations outside the US, the measurement is simply in cubic meters or cubic kilometers.