As droughts worsen across the world, investors are turning up the heat on companies wasting water and trying to pick winners from a sparse crowd of specialist listed companies looking to address the problem.
From Kenya to California and nearly half of Europe, a shortage of fresh water has grabbed the attention of policymakers and given millions of citizens a fresh window into the stressed state of the planet.
In fields on the Arizona-California border, farmers draw water from the nearby Colorado River to grow alfalfa, irrigating crops as they have for decades.
That could change soon. An investment company has purchased nearly 500 acres of farmland and wants to strip it of its water and send it 200 miles across the desert to a Phoenix suburb, where developers plan to build thousands of new houses.
It’s not just Californians paying attention to the state’s water supply anymore. It’s Wall Street.
In a sign of the growing value of water in a warming world, investors began trading futures of the coveted commodity, tied to California water prices, for the first time last week.
The novel marketplace allows speculators to make money betting on future prices of California water while allowing farmers, businesses and municipal suppliers to hedge against price swings and stabilize their costs.
In the arid West, scarce water supplies are growing scarcer. Climate change is shrinking snowpack in river basins throughout the region, leaving the future water supplies for cities, industries and farmers uncertain.
The Water News Network is San Diego County’s source for water news and information.
