Abstract
Water is a rapidly shrinking commodity. As we continue to use water for industry, farming, and sustaining our own lives, we must realize its intrinsic value. In December of 2020, water was given a new value as a future on a commodities market. This paper aims to discuss the practical, ethical, and financial considerations of trading water in this manner. A thorough conceptual analysis of the literature and research from 2009 to 2020 related to commodities and their history was performed, and a more contemporary review of water policy and pricing. The goal is to develop a mixed solution that gives value to water without allowing it to be exploited to the detriment of the poor; water must be accessible and affordable if it is to be managed ethically. Approaching water as a high-value resource might create a market that makes it unobtainable for most of us; however, with a system that controls pricing, creates standards, and simultaneously works to increase the supply of water, we may be able to create a “market.” Our critique of the research and available solutions indicates rising water prices and mostly regressive policies. As a result, market controls need to be implemented to control pricing while ensuring water availability for all.
Highlights
The first waterworks in the United States was built in 1802
Water scarcity created a shift from solely an intrinsic value of water to include its financialization
California has the seventh-largest economy globally, in which agriculture accounts for USD 47.1 billion of the state’s gross domestic product (GDP). This is 2% of the overall GDP of the state, the largest in any American state, amounting to more than 12.5% of the country’s agricultural production (Manley, 2017). This demonstrates how vital water is to the economy of California
Summary
The first waterworks in the United States was built in 1802. Over the 80 years, there would be over 600 waterworks nationwide (Stets, 2015)—increasing access, use, and cyclic supply and demand that would aid in the country’s development. It may have sparked outsized growth of agri-business and made small to medium-sized farmers more at risk [e.g., volatility similar to that of the Dojima Rice Exchange experiment of 7.20% (Algieri, 2018; Hamori et al, 2001; Shi et al, 2016)] This conceptual analysis aims to look more closely at the motivating factors for water as a commodity and gathers data from several sources and critiques the findings as well as makes some recommendations for alternate solutions that conserve, control price, and make water accessible to the poor. Water must remain affordable if we are going to solve the problems ethically
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