7 ms·

Most water in the region isn't used for drinking -- there's plenty for that. Example use case: almond farmer buys 0.5% of the current capacity of the reservoir

Most water in the region isn't used for drinking -- there's plenty for that. Example use case: almond farmer buys 0.5% of the current capacity of the reservoir at the now liquid market price, with delivery 6 months from now. Instead of having cyclical "rushes on the reservoir" for the remaining farming allotment of water in the reservoir whenever capacity gets low (or just unexpected bouts of no water coming out of the faucet, when transparency into reservoir levels is poor), resulting in less efficient water practices/ruined crops, liquid futures provide farmers with stability and actionable planning. If an almond farmer buys futures delivering a million gallons of water each quarter, he can expect that water to be saved and available when the crops need it, and can plan crops around that. Other side effects: prices will be more transparent, liquid, and consistent across the region. Possible bonus: the financial incentive will potentially improve the quality of drought modeling in the region. Imagine future weather computers that use the futures price as an input.

CaptArmchair 6y ago
> Most water in the region isn't used for drinking -- there's plenty for that. I live in a densely populated region of the world where water tables have lowered due to droughts over the last couple of years while rain diminishes. Groundwater is pumped by farmers over the summer, further lowing water tables to a point where water companies sound the alarm: if the water table lowers below a certain level, water stops coming out of the household water taps. This literally happened this summers in a few municipalities. People didn't have access to clean water for basic hygiene, cleaning and drinking. You might think "what's so bad about that? They can just buy bottled water, or install a storage tank?" Well, this is a public health concern. The big reason why diseases raged so easily in the past in the Western world - and still is in the rest of the world - was/is the lack of public access to clean water. Diseases such as Cholera are directly attributed to poor sanitation and lack of clean water. Privatizing water sounds good in theory, but if the price of drinking water increases to prohibitive levels for less fortunate groups in society, you will also see an uptick in public health crises. The associated costs are - once again - deferred to the public (e.g. healthcare costs)
- kortilla 6y ago
  Water for drinking takes up a tiny fraction of uses. If this all becomes and open market, tons of wasteful crops like almonds will get wiped out way before drinking water is a noticeable expense
  - Aerroon 6y ago
    To put some numbers to this: >The water footprint of California almonds averaged 10,240 liters per kilogram kernels (or, 12 liters per almond kernel) [0] The average human needs about 2.7-3.7 liters of water a day or roughly 1,000-1,350 liters per year.[1] [0] https://www.sciencedirect.com/science/article/pii/S1470160X17308592 https://www.sciencedirect.com/science/article/pii/S1470160X1... [1] https://www.nationalacademies.org/news/2004/02/report-sets-dietary-intake-levels-for-water-salt-and-potassium-to-maintain-health-and-reduce-chronic-disease-risk https://www.nationalacademies.org/news/2004/02/report-sets-d...
    - kortilla 6y ago
      It’s mind-blowing to realize that a $5 can of almonds is an entire year of water for a family.
  - CaptArmchair 6y ago
    > Water for drinking takes up a tiny fraction of uses. The argument isn't how much water is used for different purposes relative to each other in absolute terms. The argument is availability. Fresh water isn't distributed equally across the globe. That's exactly what makes it a scarce commodity. > If this all becomes and open market, tons of wasteful crops like almonds will get wiped out way before drinking water is a noticeable expense As long as those almonds can be exported to profitable global markets, almond producers will be able to afford pumping up water / buying up water supplies, causing water related problems locally.
    - eru 6y ago
      > As long as those almonds can be exported to profitable global markets, almond producers will be able to afford pumping up water / buying up water supplies, causing water related problems locally. The commenter you are replying to is implying that in many places, like California, by and large almonds won't be able to be grown profitably to be sold to the global market when you take water costs into account. Access to global markets doesn't magically make everything profitable. (Often just the opposite for specific industries, because you'll also face global competition.)
Jochim 6y ago
What happens when there's a drought and the million gallons of water that farmer ordered can't be delivered? What happens when speculators drive prices up because they know the people that actually need/want that water have to pay or risk losing their crops. Water is important enough that it should be publicly owned and distributed. This is pretty much the only way it can be effectively managed and distributed, rather than hoarded and scalped as soon as the opportunity presents itself.
- eru 6y ago
  > What happens when there's a drought and the million gallons of water that farmer ordered can't be delivered? That would be specified in the contracts. Existing contracts for eg soy beans already have to take these possibilities into account. > What happens when speculators drive prices up because they know the people that actually need/want that water have to pay or risk losing their crops. If current future prices are clearly higher than what I expect spot prices to be in the future, I'd sell future contracts and make a killing. > Water is important enough that it should be publicly owned and distributed. This is pretty much the only way it can be effectively managed and distributed, rather than hoarded and scalped as soon as the opportunity presents itself. What makes you think that public ownership and distribution is so effective? And what are the limits of these benefits, so that they only apply to important goods? Why wouldn't we want even goods of lesser importance enjoy these benefits?
  - Jochim 6y ago
    > What makes you think that public ownership and distribution is so effective? Its ability to address needs rather than wants. A free market does not distinguish between the need for people to drink and the need for a billionaire to fill his pool with freshwater in a drought. This can extend beyond non-survival needs to societal needs. Society "needs" educated workers who can contribute to the economy. Society "needs" you to be connected to other workers either physically or electronically. Public ownership allows us to address concerns that would not be appropriate to be driven primarily by profit motive. Typically we see this in the form of services rather than the direct transfer of physical goods. Most people believe communities in remote regions should have similar access to utility networks and transport, the ongoing cost of providing these typically outweighs the revenue that could be charged, so the state steps in. The fire service is a fairly universal example of a service that should not be driven by profit motive and we have good records of the damage that occurs when they are. The military would be another, it is not in society's best interest if your primary form of defense is willing to work for whoever will pay it the most. > And what are the limits of these benefits, so that they only apply to important goods? Why wouldn't we want even goods of lesser importance enjoy these benefits? Current governance can be inflexible, it usually requires taking everyone's viewpoint into account to minimise the risk of failure or of being viewed as misspending public funds. Our solution to this at the moment is to allow private enterprise to operate in the areas where the extraction of profit is likely to cause minimal harm. This increases choice but the downside is that it introduces a huge amount of inefficiency and waste.

CaptArmchair 6y ago

> Most water in the region isn't used for drinking -- there's plenty for that. I live in a densely populated region of the world where water tables have lowered due to droughts over the last couple of years while rain diminishes. Groundwater is pumped by farmers over the summer, further lowing water tables to a point where water companies sound the alarm: if the water table lowers below a certain level, water stops coming out of the household water taps. This literally happened this summers in a few municipalities. People didn't have access to clean water for basic hygiene, cleaning and drinking. You might think "what's so bad about that? They can just buy bottled water, or install a storage tank?" Well, this is a public health concern. The big reason why diseases raged so easily in the past in the Western world - and still is in the rest of the world - was/is the lack of public access to clean water. Diseases such as Cholera are directly attributed to poor sanitation and lack of clean water. Privatizing water sounds good in theory, but if the price of drinking water increases to prohibitive levels for less fortunate groups in society, you will also see an uptick in public health crises. The associated costs are - once again - deferred to the public (e.g. healthcare costs)

kortilla 6y ago
Water for drinking takes up a tiny fraction of uses. If this all becomes and open market, tons of wasteful crops like almonds will get wiped out way before drinking water is a noticeable expense
- Aerroon 6y ago
  To put some numbers to this: >The water footprint of California almonds averaged 10,240 liters per kilogram kernels (or, 12 liters per almond kernel) [0] The average human needs about 2.7-3.7 liters of water a day or roughly 1,000-1,350 liters per year.[1] [0] https://www.sciencedirect.com/science/article/pii/S1470160X17308592 https://www.sciencedirect.com/science/article/pii/S1470160X1... [1] https://www.nationalacademies.org/news/2004/02/report-sets-dietary-intake-levels-for-water-salt-and-potassium-to-maintain-health-and-reduce-chronic-disease-risk https://www.nationalacademies.org/news/2004/02/report-sets-d...
  - kortilla 6y ago
    It’s mind-blowing to realize that a $5 can of almonds is an entire year of water for a family.
- CaptArmchair 6y ago
  > Water for drinking takes up a tiny fraction of uses. The argument isn't how much water is used for different purposes relative to each other in absolute terms. The argument is availability. Fresh water isn't distributed equally across the globe. That's exactly what makes it a scarce commodity. > If this all becomes and open market, tons of wasteful crops like almonds will get wiped out way before drinking water is a noticeable expense As long as those almonds can be exported to profitable global markets, almond producers will be able to afford pumping up water / buying up water supplies, causing water related problems locally.
  - eru 6y ago
    > As long as those almonds can be exported to profitable global markets, almond producers will be able to afford pumping up water / buying up water supplies, causing water related problems locally. The commenter you are replying to is implying that in many places, like California, by and large almonds won't be able to be grown profitably to be sold to the global market when you take water costs into account. Access to global markets doesn't magically make everything profitable. (Often just the opposite for specific industries, because you'll also face global competition.)

Jochim 6y ago

What happens when there's a drought and the million gallons of water that farmer ordered can't be delivered? What happens when speculators drive prices up because they know the people that actually need/want that water have to pay or risk losing their crops. Water is important enough that it should be publicly owned and distributed. This is pretty much the only way it can be effectively managed and distributed, rather than hoarded and scalped as soon as the opportunity presents itself.

eru 6y ago
> What happens when there's a drought and the million gallons of water that farmer ordered can't be delivered? That would be specified in the contracts. Existing contracts for eg soy beans already have to take these possibilities into account. > What happens when speculators drive prices up because they know the people that actually need/want that water have to pay or risk losing their crops. If current future prices are clearly higher than what I expect spot prices to be in the future, I'd sell future contracts and make a killing. > Water is important enough that it should be publicly owned and distributed. This is pretty much the only way it can be effectively managed and distributed, rather than hoarded and scalped as soon as the opportunity presents itself. What makes you think that public ownership and distribution is so effective? And what are the limits of these benefits, so that they only apply to important goods? Why wouldn't we want even goods of lesser importance enjoy these benefits?
- Jochim 6y ago
  > What makes you think that public ownership and distribution is so effective? Its ability to address needs rather than wants. A free market does not distinguish between the need for people to drink and the need for a billionaire to fill his pool with freshwater in a drought. This can extend beyond non-survival needs to societal needs. Society "needs" educated workers who can contribute to the economy. Society "needs" you to be connected to other workers either physically or electronically. Public ownership allows us to address concerns that would not be appropriate to be driven primarily by profit motive. Typically we see this in the form of services rather than the direct transfer of physical goods. Most people believe communities in remote regions should have similar access to utility networks and transport, the ongoing cost of providing these typically outweighs the revenue that could be charged, so the state steps in. The fire service is a fairly universal example of a service that should not be driven by profit motive and we have good records of the damage that occurs when they are. The military would be another, it is not in society's best interest if your primary form of defense is willing to work for whoever will pay it the most. > And what are the limits of these benefits, so that they only apply to important goods? Why wouldn't we want even goods of lesser importance enjoy these benefits? Current governance can be inflexible, it usually requires taking everyone's viewpoint into account to minimise the risk of failure or of being viewed as misspending public funds. Our solution to this at the moment is to allow private enterprise to operate in the areas where the extraction of profit is likely to cause minimal harm. This increases choice but the downside is that it introduces a huge amount of inefficiency and waste.